Would a Greek haircut boost markets?


Announcing a haircut on Greek bond holdings would help restore a positive mood to bond markets, which have largely priced in such a move, said DWS Investments' CIO Asoka Wöhrmann.

The potential for Greece to default has rattled markets this week, and Wöhrmann said if a haircut was introduced, devaluing the value of Greek debt, it would boost sentiment. He said people are treating the Greece issue "like the most important topic in the world, but it is not, Greece is just 3% of European GDP." He added core Europe is growing well, and global GDP is heading for 3.5% to 4% this year. Wöhrmann said any adjustment to Greek debt would suit investors who have already factored it into their positions, as well as CDS holders. "The first 12 months of the crisis will ben...

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