Standard Chartered: ECB could shift Greek bonds to ESM
The European Central Bank could transfer its holdings of Greek government bonds to the euro area’s rescue fund to provide further debt relief for the country, according to Standard Chartered Plc economists.
A transfer to the European Stability Mechanism would bypass ECB objections to being involved in a Greek debt restructuring, Standard Chartered economists Thomas Costerg, Sarah Hewin and John Calverley said in a report.
“It remains to be seen which entity would incur the likely loss,” they said.
As part of Greece’s bailout agreement earlier this year, private sector investors agreed to take a 53.5 percent loss in the face value of their Greek bond holdings, reducing the nation’s debt by 100 billion euros, the largest debt restructuring in history.