International banks are meeting in Paris Tuesday to discuss France's proposed plan for the private sector to contribute to Greece's bailout effort, people familiar with the matter said.
The meeting will be overseen by the Institute of International Finance (IIF) lobby group, the sources said. The IIF Friday said banks supported proposals to aid Greece and were considering a small number of options, and bankers are trying to hammer out details of those options. The IIF could not immediately be reached.
French banks, major holders of Greek sovereign debt, have proposed voluntarily renewing Greek bonds when they fall due, but on different terms, which could trigger a default. The sources said getting clarity on the accounting treatment of France's plan remains a key issue to getting momentum.
Politicians and bankers had expressed confidence last week that the French proposal would not trigger a default, but ratings agency Standard & Poor's Monday said it would involve losses to debt holders, most likely earning Greece a selective default rating.
Under France's plan bondholders would reinvest at least 70 percent of the proceeds from bonds maturing between now and the end of 2014 into new 30-year Greek debt.
The IIF, which represents insurers and other financial firms as well as banks including BNP Paribas, Deutsche Bank, HSBC and Societe Generale, is playing an informal role coordinating international banks to reach consensus about private-sector involvement in a bailout of debt-ridden Greece.
(Reporting by Alex Chambers, IFR Markets; Editing by Steve Slater and Hans-Juergen Peters)