Greek bonds rejoin collateral pool
04 July 2016 Athens
Image: Shutterstock
Greek government bonds are once again available for use as collateral, as of 29 June, after the European Central Bank (ECB) reinstated a waiver on its minimum credit rating requirements.
The usual credit rating threshold for using government bonds as collateral in Eurosystem monetary policy operations was suspended by the ECB’s Governing Council but will be subject to special haircuts that will be specified in the relevant legal act.
In a statement on the ruling, the council noted that it “acknowledges the commitment of the Greek government to implementing current European Stability Mechanism programme and expects continued compliance with its conditionality”.
The ruling will remain until further notice and applies to all outstanding and new marketable debt instruments issued or guaranteed by the Hellenic Republic.
The ECB’s council confirmed that purchases of Greek bonds under the public sector purchase program will be examined at a later stage, taking into account the progress made in the analysis and reinforcement of Greece’s debt sustainability, as well as other risk management considerations.
The usual credit rating threshold for using government bonds as collateral in Eurosystem monetary policy operations was suspended by the ECB’s Governing Council but will be subject to special haircuts that will be specified in the relevant legal act.
In a statement on the ruling, the council noted that it “acknowledges the commitment of the Greek government to implementing current European Stability Mechanism programme and expects continued compliance with its conditionality”.
The ruling will remain until further notice and applies to all outstanding and new marketable debt instruments issued or guaranteed by the Hellenic Republic.
The ECB’s council confirmed that purchases of Greek bonds under the public sector purchase program will be examined at a later stage, taking into account the progress made in the analysis and reinforcement of Greece’s debt sustainability, as well as other risk management considerations.
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