Wall Street Journal
June 23, 2011
Charles Dallara, managing director of the Institute of International Finance, said it's going to be harder to find a way to involve private bondholders in a new bailout for Greece than it was to design Brady bonds two decades ago to encourage banks to make debt concessions to Latin American governments.
He said in an interview that achieving significant private-sector participation in the Greek bailout without triggering a default call by rating agencies, or a credit event in the market for credit-default swaps, is very challenging. "It's a narrow path. I won't deny it," he said by telephone from Athens. "It's not going to be easy but I don't think it's impossible."
Mr. Dallara, one of the architects of the Brady bond proposal when he was an official in the U.S. Treasury more than 20 years ago, said he was in Athens working informally on behalf of the IIF membership to discuss how private sector creditors could help the Greek reform program. The IIF, based in Washington, has a membership of more than 400 banks and other financial institutions around the world.
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