The fallout from a Greek debt default can be contained if European leaders reached an agreement to let the restructuring take place in an orderly manner, former IMF chief economist Raghuram Rajan said on Wednesday.
Euro zone ministers failed on Tuesday to reach an agreement on how private holders of Greek debt should share the costs of a new bailout.
The lack of a deal pushed bond yields of Greece, Ireland and Portugal to their highest levels since the introduction of the euro in 1999, and Moody's on Wednesday placed France's top three banks on review for a possible downgrade, citing the banks' exposure to Greek debt.
"One of the advantages of this long drawn-out crisis resolution process is that many private sector entities that were exposed to Greece have reduced their exposure," Rajan told reporters on the sidelines of an investment conference in Singapore.
Reuters
