Greek debt talks stalled on interest rate -IIF

LONDON Jan 16 (Reuters) - Talks between Greece and its creditor banks to slash the country's debt pile broke down because of different views on what interest rate is acceptable, said the head of the group leading private sector talks.

"That is essentially the area where the differences are substantial," said Charles Dallara, managing director of the Institute of International Financial. "They are looking at the private sector to accept interest rates that they would not accept (themselves), which is completely unreasonable."

Dallara said the banks were "very surprised" at the stance taken by some officials -- representing both governments and multilateral institutions. The talks stalled on Friday.

Talks are due to restart on Wednesday.

"There is an urgent need for agreement to inject an element of stability," Dallara said, but added that "opening and reopening assumptions about the economic outlook" was also inconsistent with reaching a deal. (Reporting by Steve Slater)