Back
4 Feb 2015
Greek banks might lose access to ECB liquidity by this month-end - BTMU
FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, views that Greek banks might lose access to ECB liquidity at February-end as ECB has expressed unwillingness to raise the ceiling on the short-term T-bills.
Key Quotes
“The euro staged a modest rebound yesterday with EUR/USD rising back towards the 1.1500-level and moving closer to levels prior to the ECB’s QE announcement on the 22nd January.”
“The euro rebound coincided with further upside in the price of crude oil and the release of tentative details of the new Greek government’s debt plan which at least initially has been welcomed in parts by investors.”
“The Greek government plans to swap exiting bailout out loans with bonds linked to nominal GDP and perpetual bonds rather than seek a write down of the value of their debt. The proposal potentially increases the likelihood of a compromise agreement being reached between Greece and its international creditors.”
“The Greek government also wants to raise EUR10 billion by issuing short-term T-bills as bridge financing over the next three months while a new bailout is agreed.”
“However, the ECB has already stated that it is unwilling to raise the ceiling on T-bill issuance by EUR10 billion to EUR25 billion. It will keep alive concerns that Greek banks will lose access to ECB liquidity at the end of this month when the current bail-out agreement expires.”
“The Greek government is also seeking EUR1.9 billion in profits the ECB and euro-zone central banks earned on Greek debt holdings.”
“Euro-zone finance ministers are expected to hold emergency talks on the 11th February.”
Key Quotes
“The euro staged a modest rebound yesterday with EUR/USD rising back towards the 1.1500-level and moving closer to levels prior to the ECB’s QE announcement on the 22nd January.”
“The euro rebound coincided with further upside in the price of crude oil and the release of tentative details of the new Greek government’s debt plan which at least initially has been welcomed in parts by investors.”
“The Greek government plans to swap exiting bailout out loans with bonds linked to nominal GDP and perpetual bonds rather than seek a write down of the value of their debt. The proposal potentially increases the likelihood of a compromise agreement being reached between Greece and its international creditors.”
“The Greek government also wants to raise EUR10 billion by issuing short-term T-bills as bridge financing over the next three months while a new bailout is agreed.”
“However, the ECB has already stated that it is unwilling to raise the ceiling on T-bill issuance by EUR10 billion to EUR25 billion. It will keep alive concerns that Greek banks will lose access to ECB liquidity at the end of this month when the current bail-out agreement expires.”
“The Greek government is also seeking EUR1.9 billion in profits the ECB and euro-zone central banks earned on Greek debt holdings.”
“Euro-zone finance ministers are expected to hold emergency talks on the 11th February.”