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Pimco CEO says investors had enough time to prepare for Greece
[LONDON] Pacific Investment Management Co Chief Executive Officer Douglas Hodge said investors have had enough time to prepare themselves for a possible Greek default.
"Let's recognize we've had three years to prepare," Mr Hodge said at a conference in London on Thursday. "This has been a soap opera. Private capital has had ample opportunity to position itself for Greece defaulting."
European stocks declined on Thursday as the region's finance chiefs gathered in Luxembourg to work on an agreement for as much as 7.2 billion euros in bailout funds for Greece before the country's debt payments come due at the end of June. German Finance Minister Wolfgang Schaeuble has said he's drafting contingency plans for a breakdown in talks, signaling the country is preparing for a possible default.
Mr Hodge said that while he hopes that Greece will still be part of the euro region in a year's time, he has "every confidence" that the area will be fine without them.
"There will probably be some readjustment because some people, I'm sure, have taken positions in the hope that Greece will stay in the eurozone and they'll be disappointed but again, this is where the capital markets will adjust," he said.
Chancellor Angela Merkel said a deal with Greece is still possible provided the Greek government follows through on the economic-reform pledges made to creditors. Hodge said that the market "is fairly sanguine" about Greece exiting.
"Europe is large, it is stable, it has a well functioning financial system," Mr Hodge said. "It has economies that are getting stronger by the day."
Pimco, based in Newport Beach, California, posted 68.3 billion euros of net outflows in the first quarter, hurt by the departure of Bill Gross last year. The company oversees about US$1.59 trillion in assets.