Bigger French bank losses on Greek debt urged: report

France's stock market regulator has recommended French banks take a bigger loss on their exposure to Greek government bonds, the Financial Times reported on Friday.

The regulator sent a letter to its banks advising them to reassess their decisions to value Greek debt in line with a Greek bailout agreed in July, the FT said.

Negotiations are ongoing to increase private sector involvement in a second 109-billion-euro rescue for Greece.

The voluntary haircut for bond holders was set at 21 percent in July, but worsening financial conditions have spurred Germany to push for private creditor losses of up to 50 percent.

The 21 percent figure had been used by French banks as a benchmark for reporting first-half results, unlike in Germany and the United Kingdom, which recognized losses closer to 50 percent, the FT said.

The London-based paper said the regulator's letter warned that the bailout was jeopardized and the haircut was now considered insufficient.

According to a report by international inspectors on Greek debt sustainability on Friday, Greek debt can be brought down to near 120 percent of gross domestic product by the end of 2020 if private investors forgive 50 percent of what Athens owes them.

(Reporting By John Irish; Editing by Leslie Adler)