EFSF'S Regling says market turmoil may affect rescue fund - FT

LONDON Nov 11 (Reuters) - The head of the euro zone's rescue fund Klaus Regling believes this week's market upheaval in Europe has made it difficult to increase the bloc's 440 billion euro bailout fund to 1,000 billion, the Financial Times reported on Friday.

Euro zone countries had hoped to leverage the European financial stability facility fund by December, but that possibility has been reduced by the problems in the bloc this week, the newspaper paraphrased Regling as saying.

Investors have fled from bonds issued by highly indebted countries and luring them back by offering insurance on losses, the centrepiece of a plan agreed in Brussels on October 26, would now probably use up more of the fund's resources, the article cites Regling as saying.

"The political turmoil that we saw in the last 10 days probably reduces the potential for leverage. It was always ambitious to have that number, but I'm not ruling it out," he is quoted as saying.

Regling said, according to the article, that heightened investor skittishness meant the guarantees would now have to be bigger in order to convince investors to participate, meaning the fund was likely to have only three to four times the firepower.

"At least for a while, maybe the leverage is less than what we hoped three weeks ago. My expectation is it will get better because we do have a new government in Greece, and that helps."