The leader of Europe’s central bank has offered his first signal that officials may back an effort to use investors’ purchase of new Greek bonds to replace maturing securities to help stem the sovereign debt crisis, according to Bloomberg. On Monday, Jean-Claude Trichet, the President of the European Central Bank said that while he is opposed to imposing losses on creditors, it would be best to have financial institutions keep stable levels of credit. Anonymous officials have also indicated that the ECB is considering a rollover of bonds as an alternative means of fund raising, although Trichet has been adamant that “appropriate” plans do not include any form of default.

The proposal could see investors in Greek sovereign debt receive some form of incentive to roll over their holdings as they mature, such as: preferred status, higher coupon payments, or collateral. Meanwhile, European Economic and Monetary Affairs Commissioner Olli Rehn has warned that “fragilities” of the banking industry in the region make a default necessary to avoid at all costs, and urged regulators to increase capital requirements on banks to ensure they can withstand a sovereign default.

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