CB?s Stark warns on default and Greek banks

European Central Bank Executive Board member Juergen Stark said any involvement of Greece’s private creditors in a rescue must not trigger a default rating because this would put the country’s banks at risk, according to an interview in Austrian newspaper Kurier.

Stark said he understood «the desire to have the private sector participate in an appropriate manner,» according to the interview published on Kurier’s website.

“Any coercion would result in a ‘credit event’» which would cause «Greece’s credit rating to be set to ‘selective default’ or worse,» Stark said. That would «put the solvency of Greek banks at risk, because for their refinancing the ECB needs to accept Greek government bonds,» he added.