Greek debt write-off has 'opened Pandora's box': top banker

9th November 2011, Comments 0 comments

The massive write-off of Greek debt could have dangerous, unforeseen consequences, Germany's top banker, Deutsche Bank chief Josef Ackermann, said in newspaper interview Wednesday.

Speaking to the Financial Times, Ackermann said violating the idea of eurozone sovereign debt as risk-free had "opened a very dangerous Pandora's box."

And private sector involvement in the bailout of debt-wracked countries, as in the case of Greece where banks have agreed to accept a 50-percent writedown of their holdings of sovereign debt, "must stop at Greece," Ackermann said.

"We have to restore confidence in sovereign risk and that can only be done by political steps in the individual countries.... I don't see any other way out," he said.

As chairman of the Institute of International Finance, Ackermann, 63, has been closely involved in trying to restructure Greek debt with private sector involvement.

He has also advised German Chancellor Angela Merkel on financial issues.

© 2011 AFP

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