Some Banks Haven’t Written Down Greek Holdings Enough, IASB Says
Some European banks have not sufficiently written down their holdings of Greek government bonds and other “distressed sovereign debt,” the organization that sets accounting rules in the region said today.
Banks and other financial institutions are in some cases valuing these bond holdings in a way that reflects internal models more than market price, the International Accounting Standards Board said in a letter published on its website today.
“It is hard to imagine that there are buyers willing to buy these bonds at the prices indicated,” the IASB said in the letter, dated Aug. 4 and sent to the European Securities and Markets Authority. “This is a matter of great concern to us,” it said.
Governments and banks in the 27-nation European Union are negotiating the details of a second international rescue for Greece. EU leaders agreed on July 21 that the package should include about 50 billion euros from bondholders.
To contact the reporter on this story: Jim Brunsden in Brussels at jbrunsden@bloomberg.net
To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net
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