February 21, 2012
The banking industry has described its agreement with Greece to cut its debts as "unprecedented".
A group of banks and other investors in Greek government debt have agreed to exchange their debt for new bonds that are worth much less and pay a modest rate of interest.
Including the reduced interest rate, the losses to the banking industry are more than 70%.
For some of Europe's biggest banks, that means heavy losses.
"The losses are going to be substantial, but they are contained and there's a longer-term benefit for the system in having a core group of investors sit down across the table and coming together," said Charles Dallara, managing director of the Institute for International Finance, which negotiated on behalf of the banking industry.
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