According to the report, bank executives say that lenders have recently completed transactions worth 4-5 billion euros in the repos market, using as collateral Greek treasury bills and other securities. Until recently, T-bills were used only for drawing cash from the Bank of Greece’s emergency liquidity assistance (ELA) mechanism.
Until recently, interbank transactions were only conducted using securities with a very high rating (i.e. bonds of the European Financial Stability Facility). However, the stabilization of Greek economy after the completion of the first bailout program review established a climate of confidence towards Greek banks in the interbank market, the report says.
The key point now is the completion of the second review, Greek bankers say. If it is completed before the December 5 Eurogroup, it will signify that Greek banks are on the way to normalization, thereby gaining the trust of international banks. They add that after the successful completion of the second review, the interbank market will start accepting other securities such as loan portfolios, covered bonds etc as collateral for cash.