German Banks Could Face Up to 60% Loss on Greek Debt

According to various sources, German banks could face as much as 60 percent loss on their Greek government debt holdings.

The country’s banks held a conference call this week and participants discussed the potential for losses on Greek bonds of between 50 percent and 60 percent, though no final figure has been set.

Deutsche Bank AG Chief Executive Officer Josef Ackermann is planning to go to Brussels next week to discuss the potential for a bigger reduction.

Jean-Claude Juncker, who heads the group of euro-area finance ministers, said separately that talks are under way with the Washington-based Institute of International Finance on the cost to investors of a second bailout package for Greece.

According to lobbyists at the European Banking Federation, European banks are “deeply concerned” by plans to bring forward the implementation of the Basel III capital levels to 2012 from 2015.

While banks continue to take the necessary steps to build up more reserves, they are struggling to find on the open market in a climate of decreasing profitability.