Restructure all Greece’s debt, in terms Germany would offer if it wanted to restructure its own public debt

Sir, I refer to Reza Moghadam’s “Halve the debt and keep the eurozone together” January 27.

I am convinced that much of the excessiveness of Greece’s public debt was a direct result of stupid European bank regulations. These allowed banks to hold minimum or no equity at all against loans to Greece, as if Greece was just as safe as for instance Germany; all which caused too tempting risk-adjusted returns on bank equity when lending to Greece. 

In that respect, if I were negotiating on behalf of Greece, I would start out by requesting that Greece’s debt should be restructured in terms that are compatible with having been set up as an “absolutely safe”. In other words, all Greece’s debt, in terms Germany would offer if it wanted to restructure its own public debt. Then if a haircut is still needed, it would be much smaller.