Greece insists it will not default on debt

Moody's downgrades eight Greek banks, but Finance Minister dismisses fears of a breach of a "distraction"

Greece last night insisted he remains committed to the terms of its ? 110 billion (£ 96bn) rescue despite fears of the scale of losses banks face if the value default of its debt.

After Finance Minister Evangelos Venizelos said that politicians who saw three solutions to the debt crisis, including a 50% cancellation of debt of Greece, officials moved to minimize expectations of impending decisions.

Greece is the first eurozone country to seek a bailout. Estimates of the impact of a break in the euro area since the loss of central banks of Europe to ? 300 000 000 000, ? 630bn to ? 150 banks and peripherals dollars to the European Central Bank.

• Credit Suisse analysts concluded: "We believe that the probability of a general breakdown of the euro is only 10% of the cost of not helping the countries of the periphery is greater that the cost of rescue. "
• Venizelos characterized the relationship, which included a stage for default or disorderly implementation of an agreement of ? 109bn rescue seconds between Greece and its creditors in July, as a distraction. Greek Prime Minister George Papandreou, who said: "Because a lot has been said and written, from the scene, I emphasize again that we have chosen to implement the agreement of July 21."

In another volatile day of trading on global stock markets, Moody's downgraded eight Greek banks because of their exposure to the country's debt and the deteriorating economy because of concerns about the ability of countries to the ? 8 billion of the rescue money that has to make debt payments next month.

French banks, which have lost 50% of its value in three months, ended up as speculation about a plan to help rid them of their loans more difficult in a scheme inspired by the United States. United States. impaired asset relief program implemented after the collapse of Lehman.

Data from Fitch Ratings agency said the money market funds in the U.S. market - to help banks to obtain funds for daily operations - are becoming more selective in lending money cash provided by European banks. From late August, the funds of the sample by Fitch shows an 8% decrease in the exposure of European banks and 27% from the end of May. Comments from ECB officials also raised expectations that the bank had to intervene to provide liquidity to banks to raise finance difficult.

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