ECB T-bill hurdle overcome with other collateral

Greek banks will keep receiving the same amount of emergency central bank aid despite a reduction in the amount of treasury bills they can offer in exchange, a euro-area central bank official said on Tuesday.

The European Central Bank’s Governing Council last week allowed a temporary increase in the amount of T-bills Greek banks can pledge for so-called Emergency Liquidity Assistance to lapse, reducing it to 3.5 billion euros from 7 billion euros, said the official, who was briefed on the decision.

However, other acceptable collateral including asset-backed securities on banks’ balance sheets have increased in value enough to make up the difference, he said.

Greece on Tuesday sold a total of 4.06 billion euros of four-week and 13-week T-bills before a redemption of 5 billion euros of similar securities on Friday.

After the ECB’s decision to reduce the total amount of T-bills acceptable as collateral, banks could have faced funding difficulties unless they were able to find other acceptable collateral.

Overall, Greece is trying to plug a financing gap of as much as 32.6 billion euros.


Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.