French banks, including BNP Paribas, have told the French government they are willing to partly roll over maturing Greek government bonds in a bid to avoid a default by the country.
Under the proposal discussed in recent days between the French Banking Federation and the French Treasury, bondholders would re-invest about 70 percent of Greek sovereign debt maturing from mid-2011 to mid-2014, said one of the people directly involved with the talks, Bloomberg reported on Monday.
Fifty percent of the redemptions would go into 30-year Greek securities, with the remaining 20 percent invested in a fund made of ?very-high quality? securities that would back the 30-year bonds, that person said. The proposal may be altered, he said.
European governments are seeking to persuade the region?s banks to voluntarily participate in Greece?s second bailout to make the country?s debt burden more sustainable.
European banks held about $52 billion of Greek sovereign debt at the end of last year, with French banks owning $15 billion, the second-largest position after German banks, which owned $22 billion.