ECB tightens screws on Greek banks
- Written by E.Tsiliopoulos
According to the Financial Times, the European Central Bank has decided to make it illegal for Greek banks to add to their holdings of short-term government debt “in a move that effectively cuts off a key source of funding for Athens and heightens the risk of a sovereign default.”
The ECB had already warned the four major Greek banks (Piraeus, National, Alpha, Eurobank) mid-February not to load further on Treasury bills (t-bills). The difference now is that what was a recommendation has now become legally binding. A new letter to this effect has already been sent, “according to one person familiar with the matter,” the FT report.
“Greek banks now hold €11bn of t-bills.The Greek government is now just below a €15bn issuance limit. It must roll over a portion of t-bills with a six-month duration on April 14, a portion of which are thought to be held by international investors,” the Financial Times add.
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