European Central Bank Gives Breath of Liquidity to Greek Banks



newego_LARGE_t_1101_54635014_type13145The European Central Bank gave a breath of liquidity to Greek banks after Thursday’s decision to include them in its quantitative easing program and the purchase of EFSF bonds.

The decision constitutes an indirect capital boost, from which banks can earn between 800 million to 1 billion euros through the sale of the bonds.

The bonds were issued under the first recapitalization (the state share was covered with European Financial Stability Facility bonds) in addition to bonds that were given to banks that absorbed troubled banks. Banking sources estimate that the total worth of the bonds exceeds 30 billion euros.

As announced by a ECB spokesperson, EFSF securities can be included in a quantitative easing (QE) program because they have high guarantees. The EFSF bonds in the hands of Greek banks are on the list of bonds included in the QE program since March 10.

After the decision of President Mario Draghi, 50 percent of the bonds can be purchased by ECB.

Piraeus Bank has EFSF bonds worth 14.22 billion euros; National Banks holds bonds worth 9.08 billion euros; Eurobank has 10.04 billion euros in EFSF bonds; Alpha Bank has EFSF bonds worth 4.1 billion euros. The total for Greek banks is about 37 billion euros and they are allowed to sell EFSF bonds worth 11.5 billion euros.


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