EU May Allow 50% Writedown on Greek Debt, Considering Bank 'Backstop'
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U.S. stocks ticked lower following headlines the EU is considering a one-time write-down on Greek debt, a "backstop" for the banking industry, and continued bond purchases through central banks.
One source suggests the write-downs could be for as much as 50 percent. Under the plan, bondholders would likely exchange Greek debt for new bonds at a reduced face value backed by the Euro’s AAA-rated rescue fund.
Specifically for Greece, regulators may be considering a multi-point plan which would include: new capital for banks, more funds for the European Financial Stability Facility (EFSF), a focus on increasing competitiveness and changes to current European treaty agreements, essentially working to narrow management of economic policies.
Official plans for the next step will likely be announced following an emergency euro area summit meeting on Sunday, October 23rd.
After rallying as much as 134 points just after the open, the Dow Jones Industrial Average last traded at 11,551, up about 73 points from Thursday's closing price. The Nasdaq is currently up 21 points and the S&P 500 is up about 10.
One source suggests the write-downs could be for as much as 50 percent. Under the plan, bondholders would likely exchange Greek debt for new bonds at a reduced face value backed by the Euro’s AAA-rated rescue fund.
Specifically for Greece, regulators may be considering a multi-point plan which would include: new capital for banks, more funds for the European Financial Stability Facility (EFSF), a focus on increasing competitiveness and changes to current European treaty agreements, essentially working to narrow management of economic policies.
Official plans for the next step will likely be announced following an emergency euro area summit meeting on Sunday, October 23rd.
After rallying as much as 134 points just after the open, the Dow Jones Industrial Average last traded at 11,551, up about 73 points from Thursday's closing price. The Nasdaq is currently up 21 points and the S&P 500 is up about 10.
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