UPDATE 1-German banks, insurers to support Greek bailout

* German financial firms agree not to sell Greek bonds

* Firms agree to keep open credit lines to Greek banks

* Firms agree to buy KfW bonds to finance bailout

* Scale of contribution remains unclear

(Adds detail, background)

BERLIN/FRANKFURT, May 4 (BestGrowthStock) – Germany’s top bankers on
Tuesday agreed to back a bailout of Greece, mainly by keeping
open credit lines to banks and by agreeing not to cut their
exposure to government bonds, as part of a private sector
contribution.

Some of Germany’s top financial firms agreed to keep up
support for the duration of a 110 billion euro ($147 billion)
bailout program agreed by the European Union and the
International Monetary Fund on Sunday, after Athens committed
itself to years of painful austerity. [ID:nLDE64201n]

Germany’s finance minister Wolfgang Schaeuble told a Berlin
press conference that German financial firms agreed to buy bonds
issued by state controlled bank KfW as a way to finance a
bailout, although the scale of the contribution remained
unclear.

At the meeting, which was attended by representatives of
Germany’s top financial firms, including Commerzbank (CBKG.DE: )
and some Landesbanken, Deutsche Bank’s (DBKGn.DE: ) Chief
Executive Josef Ackermann said it was vital to support a bailout
of the southern European nation.

“It is exceedingly important that we put out the fire of
this burning house,” Ackermann said. “When a house is burning
and fire threatens to spread, it is not the moment to have a
long debate over the poor construction of the house.”

The move comes as a prelude to a similar private-sector
effort on a pan-European basis. European finance ministers are
preparing to ask banks to keep their Greece exposure for the
duration of the EU/IMF aid package, so as not to undermine the
bailout. [ID:nVIE003532]

Ackermann told the Berlin press conference that German
financial firms “will maintain credit lines to the Hellenic
Republic as possible,” although it remained unclear which German
firms were involved in the bailout effort.

Allianz (ALVG.DE: ) and Munich Re (MUVGn.DE: ) had reacted
positively to initial suggestions, Ackermann said. Munich Re
said it would participate in the private sector’s efforts.
[ID:nWEA9989]

Deutsche Bank’s Ackermann has been coordinating efforts to
involve the German private sector in the aid package for Greece.
[ID:nLDE63T0IC]

Support from the private sector would make it easier for
politicians in Berlin to sell a bailout to a sceptical public
ahead of a key state election on Sunday.

The world’s top private-sector bankers have backed Greece’s
bailout package but gave few details of what role the financial
sector will play alongside governments and international
agencies, keeping markets jittery. [ID:nLDE6420Q8]

Rescue funds are set to start flowing to debt-ridden Greece
this week, but fears about the viability of the largest-ever
bailout of a country have rattled the same markets it was
intended to soothe.

German banks have around $45 billion in exposure to Greece,
the second-biggest after France. [ID:nLDE63R0Y1]
Stock Market Trading

(Reporting by Gernot Heller in Berlin; Writing by Edward
Taylor; Editing by Rupert Winchester)
($1 = 0.7508 euro)

UPDATE 1-German banks, insurers to support Greek bailout