ECB may take losses in new Greek debt restructuring

FXstreet.com (Córdoba) - The European Central Bank and euro zone national banks are looking at taking significant losses of their Greek bond holdings as an ultimate attempt to reduce Greece's debt and keep it in the euro zone, Reuters reported Friday, citing unnamed officials.

Adding to private creditors haircuts on Greek debt applied in February, European policymakers are now analyzing further debt restructuring. The latest aim is to reduce Greece's debts by a further ¬70-100 billion, cutting its debts to a more manageable 100% of annual GDP, Reuters reported.

This would require the European Central Bank and national central banks to take around 30% of losses on their holdings of Greek government bonds, and could also involve national governments also accepting losses. However, losses on Greek debt could require recapitalization of several euro zone central banks.

Officials described a further restructuring of Greek debt as a last chance to restore the country to solvency, with the agreed goal of cutting its debt to 120% of GDP by 2020 already seen as far beyond reach, the report says.

"It is very complicated and the precise method has not been decided yet because it is very early days," one source told Reuters.