Seeking new means of financing the credit system

Seeking new means of financing the credit system

Greek banks are making plans for the period after Greece’s exit from the bailout program, when they will no longer have access to a supply of cheap cash from the European Central Bank, so they are instead seeking liquidity through various alternative means outside the Eurosystem.

Following ECB President Mario Draghi’s formal statement last Thursday that put an irrevocable end to any hopes of Greece’s inclusion in the European Central Bank’s quantitative easing (QE) program and the extension of the waiver that allows Greek debt to be accepted as collateral for regular auctions of ECB cash despite Greek bonds’ junk rating, the country’s banks are already gearing up for the new environment.

In this context they are weighing their options, which include obtaining cash from the interbank market, from secondary bond trading and through the securitization of bad loans.

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