ECB to Accept Greek Collateral if Reforms on Track

The European Central Bank is willing to again accept Greek bonds for funding if Athens keeps to reform pledges, its president said on Wednesday, defending the euro zone central bank’s treatment of Athens.

In a sometimes heated exchange with lawmakers in the European Parliament, Mario Draghi said the ECB could reverse an earlier decision that makes it harder for Greece and its banks to access finance.

“The ECB had no choice other than lifting the waiver,” Draghi told lawmakers, during an appearance in the parliament, raising his voice to overcome heckles as he defended the central bank’s treatment of Greece.

“Having said that, we are ready to reinstate the waiver as soon as the Governing Council will decide that the conditions for a successful completion of the program are in place.”

It appeared from Draghi’s remarks, however, that no such move to again accept Greek bonds as security for ECB funding would be immediate.

The ECB lifted the waiver on February 4.

In its absence, Greek banks are relying on short-term emergency finance.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza