BRUSSELS (Reuters) – European policymakers are working on “last chance” options to bring Greece’s debts down and keep it in the euro zone, with the ECB and national central banks looking at taking significant losses on the value of their bond holdings, officials said.

Private creditors have already suffered big writedowns on their Greek bonds under a second bailout for Athens sealed in February, but this was not enough to put the country back on the path to solvency and a further restructuring is on the cards.

BRUSSELS (Reuters) – European policymakers are working on “last chance” options to bring Greece’s debts down and keep it in the euro zone, with the ECB and national central banks looking at taking significant losses on the value of their bond holdings, officials said.

Private creditors have already suffered big writedowns on their Greek bonds under a second bailout for Athens sealed in February, but this was not enough to put the country back on the path to solvency and a further restructuring is on the cards.

BRUSSELS (Reuters) – The European Commission warned on Wednesday that the EU could take over supervision of benchmarks such as Libor as one of its most senior officials unleashed a broadside at the Bank of England for its failure to stamp out rigging.

Manipulation of Libor, which is used to set prices for trillions of dollars of financial products around the globe, has landed Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) with a penalty of $453 million, claimed the scalp of its chief executive and threatens to drag in several other banks into the rate-fixing scandal.

FRANKFURT/BRUSSELS (Reuters) – The European Central Bank is putting pressure on the organizers of Euribor for an overhaul to shore up faith in the benchmark interest rate following a scandal over the manipulation of the Libor standard, sources familiar with the matter said.

The move chimes with Tuesday’s warning from U.S. Federal Reserve Chairman Ben Bernanke that the system for determining the London interbank offered rate (Libor) is structurally flawed.

BRUSSELS (Reuters) – The weight of debt on Europe’s banks means it is only a matter of time before euro zone governments impose losses on senior bank bondholders, analysts believe, although policymakers remain nervous about taking such a radical step.

Throughout a five-year banking crisis in Europe, euro zone governments have typically stepped in to rescue troubled banks, shielding senior bondholders from losses to keep markets and investors calm. But the costs are rising.

BRUSSELS (Reuters) – The weight of debt on Europe’s banks means it is only a matter of time before euro zone governments impose losses on senior bank bondholders, analysts believe, although policymakers remain nervous about taking such a radical step.

Throughout a five-year banking crisis in Europe, euro zone governments have typically stepped in to rescue troubled banks, shielding senior bondholders from losses to keep markets and investors calm. But the costs are rising.

BRUSSELS (Reuters) – The European Commission’s proposal to tighten bank supervision could be wrapped up by the end of 2012, the EU’s top regulatory official said on Tuesday, but a debate among finance ministers already exposed differences over parts of a wider banking union.

“Our objective is to have … implementation of this supervision before the end of 2012,” said Michel Barnier, who as the commissioner in charge of regulation prepares the draft law.

BRUSSELS (Reuters) – Euro zone ministers struggled to reassure financial markets on Tuesday that an aid package for Spain they outlined overnight will help stabilize the currency bloc – a task made all the harder by a German legal challenge to its crisis-fighting tools.

The ministers agreed early on Tuesday to grant Madrid an extra year until 2014 to reach its deficit reduction targets in exchange for further budget savings. They also set the parameters of an aid package for Spain’s ailing banks.

BRUSSELS (Reuters) – Looser budget deficit targets for Spain may still prove difficult to reach, according to an EU document that demands the country be subjected to three-monthly checks, a move that will tighten supervision of the euro zone’s fourth-largest economy.

Europe is set to grant Spain an extra year to reach deficit targets laid down in EU law as the country grapples with recession and a banking crisis, diplomats said.

BRUSSELS, July 9 (Reuters) – Spain’s economy minister will
outline further budget savings to his peers, paving the way for
Europe to grant the euro zone’s fourth-largest economy an extra
year to reach its deficit targets, diplomats said on Monday.

Although no final decision is expected at a Eurogroup
meeting of euro zone finance ministers for a bailout of Spain’s
banks, a wider gathering of EU finance chiefs on Tuesday is set
to ease a debt goal that has pressured Madrid to make punishing
cuts that are exacerbating a recession.