Oct. 21 (Bloomberg) -- Commerzbank AG Chief Executive Officer Martin Blessing said Greece should declare insolvency and restructure its debt to calm down financial markets, German mass circulation daily Bild reported.
“It has to become clear that states have only two options: Either they service their debt as agreed or they declare insolvency with all the tough consequences”, the newspaper quoted Blessing as saying.
Banks would require more capital to be able to handle a Greek insolvency, Blessing said according to Bild. For this, governments have to quickly put up clear rules that apply to all banks. Blessing said if given 18 months to comply with new capital requirements, banks would try to meet them by cutting business, which in turn would hold back private sector lending and hurt the ecomomy.
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