JPM's Michele: Why Greece needs a severe haircut

Bob Michele, global CIO of fixed income and currency at J.P. Morgan Asset Management, has said Greek bond holders should take a huge hit to help resolve the debt crisis in Europe.

The co-manager of the JPM Strategic Bond fund said the latest measures being taken in Europe would not work, with the only real solution to the problem to shore up the banking system. As part of this, he said bond holders owning Greek debt should have already taken a haircut of up to 60% in order to resolve the situation. "As a long-term debt investor, you understand that where bad debt exists, the only solution is to see where it exists and inject capital into the banking system," he said. "This should have happened at the start. "So Greek debt should have been haircut by 60% a...