The Athens Stock Exchange opened in free fall today, with -10% losses, following an announcement by the European Central Bank saying it lifted its waiver on credit requirements for assets posted as collateral by Greek financial institutions. At 10.41am local time the index was at 775,84 points and -8,51% losses.
After the ECB announcement, Greek finance minister Yanis Varoufakis issued a statement saying, “This decision does not reflect any negative developments in the country’s financial sector and comes after two days of substantial stabilization.”
Here’s Varoufaki’s full statement:
The Governing Council of the ECB decided to refer to emergency liquidity assistance (ELA) of Eurosystem counterparties seeking to secure liquidity through deposit Greek securities as collateral.
This decision does not reflect any negative developments in the country’s financial sector and comes after two days of substantial stabilization. According to the European Central Bank (ECB), the Greek banking system remains adequately capitalized and fully protected through access to the ELA.
The European Central Bank (ECB) decision puts pressure on the Eurogroup to proceed rapidly to conclude a new mutually beneficial agreement between Greece and its partners.
The government daily widens its circle of consultation with partners and institutions to which they belong, remains unwavering in its goal of social salvation program approved by the vote of the Greek people, and consults with a view to drawing up European policy that will finally end the hitherto self-sustaining social crisis of the Greek economy.
The ECB’s statement effectively means that Greek banks can’t post Greek sovereign bonds as collateral to be used in the ECB’s monetary policy operations.
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