ECB poised to raise heat on Greece's beleaguered banks

Section:

Claire Jones and Alex Barker
Financial Times, London
Tuesday, June 30, 2015

When the eurozone's central bankers meet in Frankfurt on Wednesday, they could make a decision that some officials fear could push one or more of Greece's largest banks over the edge.

The European Central Bank's governing council is poised to impose tougher haircuts on the collateral Greek lenders place in exchange for the emergency loans. If the haircuts are tough enough, they could leave banks struggling to access vital funding.

The ECB on Sunday imposed an E89 billion ceiling for so-called emergency liquidity assistance, effectively putting the Greek banking system into hibernation. If, to reflect the increased risk of default, the ECB now applied bigger discounts to the Greek government bonds and government-backed assets that lenders use as collateral, that could leave banks struggling to roll over those emergency overnight loans. ...

... For the remainder of the report:

http://www.ft.com/intl/cms/s/0/2d09e45a-1f43-11e5-ab0f-6bb9974f25d0.html



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