ECB unlikely to walk away from Greek banks


William L. Watts
MarketWatch
July 5, 2011

The European Central Bank is unlikely to let Greek banks fall if Greece fails to repay its debt, economists said, after a newspaper reported Tuesday that the institution would continue to accept Greek government bonds as collateral unless all major ratings agency declare the nation in default.

The Financial Times, citing an unnamed senior finance official, said the ECB would rely on the principle of using the best rating available from the agencies — Standard & Poor’s, Moody’s and Fitch.

An ECB spokesman said the bank had no comment on the report.

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