ECB to accept exchange of its Greek bonds, says report

The European Central Bank has agreed to help Greece reduce its debt by accepting to exchange the Greek bonds it holds if the restructuring deal with private bondholders proceeds, the Wall Street Journal has reported.

The ECB had so far been reluctant to touch its holdings in Greek debt but quoting unnamed sources with knowledge of the discussions, the WSJ reports that the Frankfurt-based central bank is set to switch its stance.

?The ECB has agreed to exchange the government bonds it purchased in the secondary market last year at a price below face value, provided the debt-restructuring talks have a successful outcome,? the newspaper said.

?The ECB won’t take a loss on the transaction, but it isn’t clear whether the bank will exchange the bonds at the below-par price at which it purchased them or whether it will make a profit, these people told The Wall Street Journal.?

The ECB?s concession could result in Greek debt being reduced by a further 11 billion euros.