ECB blocks banks from using Greek debt as collateral

FRANKFURT–The European Central Bank said Wednesday it would suspend a waiver it had extended to Greek public securities used as collateral by the country’s financial institutions for central bank loans.

The announcement came as officials raised pressure on the new Greek government to come to terms with its international creditors on the country’s bailout program.

Because Greek government bonds are junk rated, and thus below the ECB’s minimum threshold, Greek banks have relied on the waiver to post collateral for cheap ECB financing through the central bank’s regular facilities.

Full article: ECB blocks banks from using Greek debt as collateral (MarketWatch)

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