Central Banks

Friday, July 1, 2011 - 08:52

Inst Intl Finance: Ready to Engage in Voluntary Greece Support

WASHINGTON (MNI) - The Washington-based international banking
group, the Institute of International Finance, said Friday its members
are ready to engage in "voluntary" support for Greece to improve the
country's short-term recovery prospects. The statement by the board
cites options such as debt rollovers, extensions or debt buybacks.

The text of the statement follows:

The Board of Directors of the Institute of International Finance is
committed to working with its membership and other financial
institutions, the official sector, and the Greek authorities to deliver
substantial cash-flow support to Greece, as well as to lay the basis for
a more sustainable debt position.

The private financial community is ready to engage in a voluntary,
cooperative, transparent and broad-based effort to support Greece given
its unique and exceptional circumstances. We welcome the recent approval
by the Greek parliament of the reinforced Greek economic reform program
and the implementation law put forward by the government.

As Greece advances in its reforms, it will be crucial for the
official sector to continue providing funding for the Greek banks until
the benefits of steady progress under the reform program would allow
them banks to regain access to market financing.

The involvement of private investors will complement parallel
official financing and liquidity support and will be based on a small
number of options. These options will include a roll-over or extension
of maturities and the re-investment of creditor claims into long-dated
instruments with principal collateralization. In addition, it would be
important to consider possible debt buyback proposals, which could,
along with further fiscal adjustment, begin to reduce the stock of debt
and help pave the way toward improved debt sustainability.

The operational details of these options are already under
discussion and will be advanced in the period ahead, with the objective
of providing significant cash-flow support to Greece during 2012-14 on
the basis of broad-based voluntary participation by private investors,
subject to economic and legal reviews by individual institutions. In
addition, debt-buyback techniques will be explored.

We are committed to playing our role in improving Greece's
short-term recovery prospects and longer-term sustainability, as well as
supporting financial stability.

** Market News International Washington Bureau: 202-371-2121 **

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