Europe Seeks To Get Banks On Board Greek Bail-out

By Gernot Heller and Lionel Laurent

(Reuters) - European governments are trying to persuade banks and insurers to share the pain of a second Greek bailout package, in an attempt to avoid market meltdown while keeping taxpayers happy.

Talks between governments and creditors will begin across the euro zone on Wednesday, a source in the German government said. The European Union bloc agreed last week that any such participation could only be voluntary.

"The (German) finance ministry has invited banks and insurers for talks on a working group level in Frankfurt," the source said, adding that all relevant banks and insurers in Germany that could contribute would take part.

Separately, the French insurers' association FFSA said its head Bernard Spitz had been summoned to the finance ministry on Wednesday to discuss the Greek debt situation.

"Yes, he is there right now," a spokesman said.

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Carrefour Names New France Head As Woes Build

By Lionel Laurent

Carrefour , the world's second-biggest retailer, shifted its European head to oversee its struggling French division, the latest in a series of moves to bolster investor confidence in its recovery plan.

Carrefour, which is to face investors at an annual meeting on Tuesday, said in a statement that company veteran Noel Prioux -- who had been put in charge of broader European operations just a month before -- would now take charge of France.

Carrefour also named Thomas Huebner, a Swiss national who has worked at McDonald's and also headed a handful of startup supply companies, as new head of European operations.

The retailer has underperformed in its key home market of France, Europe's second-largest economy, and said it now sees first-half results there lagging the expectations of its own executive board.

Chief Executive Lars Olofsson had taken charge of the retailer's home market after firing previous France chief James McCann. France accounts for 40 percent of group sales and is under pressure as rivals keep prices low to gain market share.

"It sort of smacks of desperation," a London-based analyst said. "Why did they appoint him to Europe and suddenly appoint him to France?"

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France Plays Down Bank Credit Rating Fears

By Lionel Laurent and Leigh Thomas

PARIS, June 15 (Reuters) - France defended its banks' financial firepower on Wednesday after rating agency Moody's said it might downgrade them because of exposure to Greece's debt-stricken economy.

The Moody's warning, which cited the possible impact of a Greek debt restructuring as policymakers thrash out a fresh rescue package, dragged down French bank share prices and pushed up the cost of insuring them against default.

"We are not worried ... French banks are among the best rated currently and the most solid of the big international banks," government spokesman Francois Baroin told reporters.

French Secretary of State for European Affairs Laurent Wauquiez called for calm and reiterated French opposition to any Greek debt restructuring classed as a default.

"French banks are exposed to Greece...(but) they are less exposed than the German banking sector, for instance," he said. "On all these subjects we need to stay calm."

French banks are second to Germany in exposure to Greek public-sector debt but they have the highest overall bank exposure to the Greek economy, according to the Bank for International Settlements, making them vulnerable to a potential restructuring of Greece's 340 billion-euro debt mountain.

They have however enjoyed above-average credit ratings and cheap funding costs relative to peers, helped by France's 'AAA' sovereign rating and strong household balance sheets.

With the macroeconomic picture darkening and the funding advantage slowly in retreat, a downgrade is perhaps overdue for top French banks BNP Paribas (BNPP.PA), Societe Generale (SOGN.PA) and Credit Agricole (CAGR.PA), some analysts say.

"A downgrade of all three French banks would be an appropriate reflection of realities in the credit markets," said RBS analyst Jorge Mayo, adding Germany's Deutsche Bank (DBKGn.DE) was now trading at narrower spreads than the French.

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French Banks Share ECB Fears Over Greek Restructuring

By Lionel Laurent and Matthieu Protard

(Reuters) - French banks share the European Central Bank's concerns over a potential restructuring of Greece's sovereign debt, the head of the French Banking Federation told Reuters on Tuesday, adding they had not been approached on the topic.

"We have not been approached yet on the topic (of a Greek restructuring) ... But we share the concerns clearly expressed by the European Central Bank," Francois Perol, said on the sidelines of a parliamentary hearing.

France's banks also feel any proposal should treat market participants equally, said Perol, who is also chairman of lender BPCE, parent of Natixis (CNAT.PA).

"We consider these are bonds that are traded on a market ... Whatever is decided upon requires an egalitarian treatment, I would say, of market participants."

European Banks Moving Toward Rollover Of Greek Debt

By Lionel Laurent and Edward Taylor

PARIS/FRANKFURT, June 13 (Reuters) - European banks holding billions of euros in Greek sovereign debt appear to be moving towards agreement on a rollover in which they would buy new debt to replace bonds reaching maturity.

The rollover, which would be part of a second bailout package for Greece worth around 120 billion euros, would give Athens more time to tackle its 340 billion euro ($488 billion) debt mountain -- though many analysts believe a much deeper restructuring, in which creditors would have to take losses, remains likely in the long term.

Germany last week proposed a swap in which private investors would exchange their Greek government bonds for new ones, effectively extending Greek bond maturities by seven years. But banks appear to be favouring the softer option of a rollover.

"We are more and more starting to converge around a Vienna Initiative-style rollover," said Jacques Cailloux, European economist at RBS, referring to a scheme in which European banks agreed to maintain their exposure to Eastern Europe when it faced economic pressures in 2009.

Private sector participation in the new Greek bailout would be worth around 30 billion euros, euro zone official sources have said. The rest of the 120 billion euros would be provided by proceeds from sales of Greek state assets, and by additional emergency loans from the European Union and the International Monetary Fund. [ID:nLDE7581PP]

So far only a few banks have publicly come out in favour of a rollover, such as France's Credit Agricole (CAGR.PA), which owns Greek bank Emporiki (CBGr.AT). But Germany's banking association on Saturday said it backed the idea of private creditors participating in the rescue, though it did not specify how. [ID:nLDE75A065]

"They're going to do a rollover now it seems," said Nick Firoozye, head of regional interest rate strategy at Nomura.

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Madoff's French victims' fate tied to Luxembourg case

By Lionel Laurent and Matthieu Protard

A group of 78 French victims of Bernard Madoff's giant Ponzi scheme must await the outcome of legal proceedings in Luxembourg to find out if they stand to recoup some $40 million in investments from Swiss bank UBS, a Paris court said on Thursday.

The investors had filed a complaint in Paris accusing UBS of "tricking" them by sponsoring a Luxembourg-registered fund, Luxalpha, which for four years fed assets directly to the convicted swindler without saying so in its prospectus.

The Paris Commercial Court declared itself competent to judge on the matter but declined to do so before further clarification in Luxembourg, where Luxalpha is being liquidated.

This decision appeared to give more breathing room to UBS, which has denied the charge, as it also fights a $2 billion lawsuit from the trustee liquidating Madoff's companies.

The trustee, Irving Picard, has said UBS's backing lent the Luxalpha fund "an aura of legitimacy" while shielding the bank via hidden side agreements.

"It's a decision that we find hard to understand and that is disappointing for the investors," said Sophie Scemla, a partner at Orrick, Rambaud and Martel, which is defending the investors.

UBS's lawyer, Denis Chemla, was unavailable for a comment.

Credit Agricole Backs Greek Debt Extension

(Speaking exclusively to Reuters, Credit Agricole CEO Jean-Paul Chifflet's backing of an extension of Greek debt maturities was the first such statement by a European bank chief and set the ball rolling for banks to start weighing in on how they might take part in a fresh Greek aid package.)

Lionel Laurent and Matthieu Protard

MILAN, June 8 (Reuters) - French bank Credit Agricole (CAGR.PA), among the most exposed in Europe to Greece's debt-stricken economy, would support an extension of Greek sovereign debt maturities, its chief executive told Reuters.

Greece is in its third year of recession and facing a fresh wave of austerity measures as it tries to clinch a new bailout from international lenders amid sky-high borrowing costs.

"If we lighten Greece's sovereign debt load it should benefit the Greek economy and therefore the actors of the Greek economy," Jean-Paul Chifflet said on Wednesday. "I am very much in favour of this."

Credit Agricole has not yet been approached by authorities to discuss a possible extension of its 631 million euro ($924.5 million) Greek debt portfolio but this is likely to happen soon, the CEO added, speaking on the sidelines of a news conference.

Later on Wednesday evening, in an apparent bid to soften the CEO's stance, Credit Agricole issued a statement saying its support for a rollover of Greek debt maturities would be under the condition that "all private bondholders, not just banks, would be involved."

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