Banks are pushing back against European leaders on the size of losses they are ready to accept on Greek bonds as officials struggle to rescue the debt-laden country while avoiding a default. There are limits to what could be considered as voluntary to the investor base and to broader market participants, Charles Dallara, managing director of the Institute of International Finance, an industry group thats participating in the talks on Greek debt, said in an e-mailed statement. Any approach that is not based on cooperative discussions and involves unilateral actions would be tantamount to default.

The discussions are part of an attempt to solve the two- year-old sovereign-debt crisis that has pushed Greece towards default and roiled global markets. European Union leaders, who hold a second summit in four days on Wednesday, are seeking an agreement on bolstering the regions rescue fund, recapitalising banks and providing debt relief to Greece to avoid contagion spreading to Italy and Spain.

Financial companies, represented by the Washington-based IIF, proposed a loss of 40% on Greek debt, said a person briefed on the matter. Jean-Claude Juncker, who leads EU finance ministers, said talks on private-sector involvement in a second aid package for Greece are focussing on losses of 50% to 60%.

The IIFs strategy is to say the burden is being unevenly shared and theres a risk of a chain reaction, said Klaus Fleischer, a professor for banking and finance at the University of Applied Sciences in Munich.

Policy makers are seeking a voluntary agreement with Greek bondholders on reducing the countrys debt to avoid the unpredictable consequences of an outright default. The IIF, comprising 450 of the worlds biggest financial firms, said a default would risk keeping Greece locked out of international capital markets for years.

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Greek PM hopes EU summit will turn page

Athens: Greek PM George Papandreou said he hoped that Wednesdays summit of European Union leaders in Brussels could turn the page on his countrys debt crisis. I hope that we will come to decisions, this is our partners will, we want to put an end, turn a page, in order for the country to move forward, Papandreou said in a meeting with the Greek President.