New York Times
July 24, 2011
The finance industry’s lead negotiator on debt relief for Greece expressed a positive view Sunday of the deal reached last week, saying that it would lead to write-offs at some institutions but over all would help assuage fears about the health of European banks.
“This deal has relieved a lot of pressure,” said Charles H. Dallara, managing director of the Institute of International Finance, whose members include most large global banks. “Now there is a sense that the losses are understood and broadly viewed as quite manageable.”
Many analysts have been skeptical that the agreement reached Thursday by European leaders, which calls for banks to accept a 21 percent cut in the value of their Greek bonds, will bring lasting relief to Greece or ease market tensions. But Mr. Dallara said the accord would help prevent fears about Greece from infecting other countries like Spain and Italy and at the same time undermining confidence in banks.
“The uncertainty swirling around this deal was catalyzing negative contagion in two directions,” he said.