UBS chairman says Greek default increasingly seen by IMF as controllable

[April 25, 2015]  ZURICH (Reuters) - UBS's <UBSG.VX> chairman said a default by Greece is seen by the International Monetary Fund as "systemically controllable" and he believed it would have a negligible impact on the Swiss bank itself, according to a newspaper interview published on Saturday.

Athens is lurching closer to bankruptcy, with its next big test on May 12, when it is due to pay 750 million euros to the IMF. Euro zone finance ministers told Greece on Friday that its leftist government would get no more aid until it agreed a complete economic reform plan.

In an interview with Neue Zuercher Zeitung, the chairman of Zurich-based UBS, Axel Weber, addressed the alternative if euro zone and Greek officials fail to reach an agreement.

"I've just come from a meeting of the International Monetary Fund. There, the consensus is increasingly that a Greek default would be systemically controllable," Weber said in the interview, without elaborating.
 

Weber is the former head of Germany's central bank, during which time he also served as the German governor of the IMF. He has been chairman of UBS since 2012.

Weber said the Swiss bank had reduced its exposure to Greek debt long ago, and that thus a default would have negligible consequences.

The impact of a potential Greek default is the biggest risk to the euro zone's economic recovery after a long crisis from which the 19-nation currency area is finally emerging.

Unlike at the height of the crisis in 2011-12, economists believe the euro zone is far better placed to withstand any Greek default because the currency bloc has its own bailout fund, support from the European Central Bank and a banking union that can protect banks from crisis fallout.

(Reporting By Katharina Bart; editing by Ralph Boulton)

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