German savings banks can cope with Greece

WASHINGTON: Germany's savings and landesbanks can cope with the fallout from Greece's debt crisis, the president of the DSGV savings banks association said.

"The write-downs can be realised without measures to boost capital," Heinrich Haasis told Reuters in an interview in Washington where finance ministers and central bankers were gathered for meetings of the Group of 20 and the semi-annual meetings of the International Monetary Fund and World Bank.

However, Haasis also criticised a possible broadening of the participation of private creditors in connection with a new rescue package for Greece, something German finance minister Wolfgang Schaeuble did not want to rule out in Washington.

Private sector creditors agreed in July to take a 21 percent loss on Greek bonds maturing before 2020, but the loss is more likely to be 25 percent or more, Deutsche Bank said on Friday.

"If agreements made four weeks ago are no longer valid I see little chance for a voluntary participation in the future," Haasis said, adding he did not expect an additional burden for savings banks.

Copyright Reuters, 2011