IIF statement on Greek rescue programme

LONDON: Following is the text of a statement put out by the IIF on the bank plan for a Greek debt rollover

The Board of Directors of the Institute of International Finance is committed to working with its membership and other financial institutions, the official sector, and the Greek authorities to deliver substantial cash-flow support to Greece, as well as to lay the basis for a more sustainable debt position.

The private financial community is ready to engage in a voluntary, cooperative, transparent and broad-based effort to support Greece given its unique and exceptional circumstances. We welcome the recent approval by the Greek parliament of the reinforced Greek economic reform program and the implementation law put forward by the government.

As Greece advances in its reforms, it will be crucial for the official sector to continue providing funding for the Greek banks until the benefits of steady progress under the reform program would allow them banks to regain access to market financing.

The involvement of private investors will complement parallel official financing and liquidity support and will be based on a small number of options.

These options will include a roll-over or extension of maturities and the re-investment of creditor claims into long-dated instruments with principal collateralization. In addition, it would be important to consider possible debt buyback proposals, which could, along with further fiscal adjustment, begin to reduce the stock of debt and help pave the way toward improved debt sustainability.

The operational details of these options are already under discussion and will be advanced in the period ahead, with the objective of providing significant cash-flow support to Greece during 2012-14 on the basis of broad-based voluntary participation by private investors, subject to economic and legal reviews by individual institutions. In addition, debt-buyback techniques will be explor.

We are committed to playing our role in improving Greece's short-term recovery prospects and longer-term sustainability, as well as supporting financial stability.

Copyright Reuters, 2011