FRANKFURT (DOW JONES)--Italy, not Greece, is the major concern
in the euro area right now, and Italy should commit to getting its
house in order, and should on its own rule out a default of the
country, Allianz Chief Financial Officer Oliver Baete said
Wednesday.
"Italy is crucial, it should make a statement that it is ruling
out a country default and should introduce a debt ceiling," Baete
told reporters on the sidelines of the Frankfurt Euro Finance Week
conference.
Baete also called upon regulators to take a closer look at the
current market situation and take more action.
"Markets are dysfunctional right now, now we need [regulatory]
action, but I don't see that happening," Baete said. "Nothing is
happening, except that banks are required by regulators to hold
more equity capital; now it's time to act."
He said the situation was complex, and among the measures that
could be considered is a future differentiation between a country's
"defaultable debt" and "non-defaultable debt," which could be a
previously decided percentage of gross domestic product. He also
suggested "tiering" a country's debt as a possibility.
Germany's Allianz is Europe's largest insurer by market
capitalization.
-By Ulrike Dauer, Dow Jones Newswires; +49 69 29725 500;
ulrike.dauer@dowjones.com
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