Commerzbank CEO Compares Greek PSI To Spanish Inquisition

FRANKFURT -(Dow Jones)- Commerzbank AG (CBK.XE) Chief Executive Martin Blessing Thursday criticized the bond-exchange program Greece is seeking to slash its debt, comparing the so-called voluntary nature of private-sector involvement in the deal to "the Spanish inquisition."

"The assessment base to slash Greece's debt-to-GDP ratio to 120% is quite small if you only consider private debtors," the CEO of Germany's No. 2 lender said at a press conference, adding that he doesn't understand why the European Central Bank doesn't participate.

Still, Blessing expects enough private creditors to accept the voluntary debt swap, whereby private investors will forego about 50% of their debt holdings and roll a part of the remaining debt into longer-dated maturities.

"The majority of bondholders will agree to it and my understanding is there will be retro-active collective action clauses," forcing private bondholders who didn't take part in the voluntary swap.

Asked whether Commerzbank is prepared for a potential break-up of the euro zone, the manager said almost every bank has simulated such a scenario internally, although he expects the single currency bloc to remain as it is.

-By Eyk Henning and Harriet Torry, Dow Jones Newswires; +49 69 29 725 108; eyk.henning@dowjones.com

 (END) Dow Jones Newswires 02-23-120818ET Copyright (c) 2012 Dow Jones & Company, Inc.