The tally has come out, showing Europe’s largest banks will lose as much as 30 billion Euros in total from the Greek debt write down. Part of the EU summit bailout plan for Greece drafted in Thursday included banks exchanging Greek government bonds as part of the debt buyback program.
France’s BNP Paribas SA stands to lose about 1 billion Euros, Societe Generale SA 500 million Euros, Germany’s Deutsche Bank 317 million Euros and Credit Agricole about 138 million Euros from the write downs, as calculated by analysts at Sanford C. Bernstein & Co. , asset managers in New York.
According to the European Banking Authority, ninety of Europe’s biggest banks hold about 98 billion Euros of Greek debt, and they will write down the value of Greek securities they hold by as much as 21 percent in an effort to contain the debt crisis from engulfing Spain and Italy.
“Banks should be able to digest any haircuts on Greek debt, and it is already priced in to their shares,” said Andreas Plaesier, a Hamburg-based banking analyst at M.M. Warburg. “What was really key was supplying capital to Greek banks and stopping the possible chain reaction to lenders outside the country that hold Greek banking assets.”