Greek banks tumble over writedown fears

Financial Times
October 24, 2011

Renewed optimism over a resolution to the European debt crisis prompted a cautiously positive start to the week for European equities, but Greek banks tumbled after fears that they would be sharply hit by a haircut on Greek sovereign debt.

The benchmark FTSE Eurofirst 300 was up 0.3 per cent to 980.60, as investors hoped that policymakers would build on talks over the weekend to act decisively in a second European summit on Wednesday.

But as European politicians demanded that the private sector agree to a 50 per cent writedown on Greek debt, heavily exposed Greek lenders saw their shares plunge.

Bank of Piraeus slumped 22.5 per cent to €0.24, while Eurobank EFG sank 18.4 per cent to €0.64 and National Bank of Greece dropped 17.3 per cent to €1.67.

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