Greek Bank Stocks Plummet

Wall Street Journal
October 24, 2011

Greek bank stocks plummeted Monday amid fears that a further write-downs in Greece's privately held debt will force billions of euros in fresh losses on the banks.

The write-downs would come at a time when the banks are struggling to cover a multibillion euro shortfall in their growing portfolio of bad loans.

Many analysts say that bigger debt write-downs, combined with rising bad loans, will soon force the banks to tap a special government support fund that will effectively make them wards of an already insolvent Greek state.

Amid calls at a weekend European Union summit for a 40% to 60% write-down on Greek government bonds, the Athens Stock Exchange's general index slid more than 5.8% in midday trade Monday, dragged down by a 15% decline in the main banks' sub-index.

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