Richard Milne and Gerrit Wiesmann,
July 5, 2011
The European Central Bank will continue to accept Greek debt as collateral for loans unless all the major credit rating agencies it uses declare it to be in default, said a senior finance official.
- A d v e r t i s e m e n t
The ECB would rely on the principle of using the best rating available from the agencies – Standard & Poor’s, Moody’s and Fitch – the official said.
The comments came after S&P on Monday became the first agency to warn that a plan, pushed by France and endorsed by Germany, for banks to roll over their holdings of Greek debt into new bonds would constitute a “selective default”.
The ECB’s continued support for Athens is crucial given that Greek banks are almost entirely dependent on the European Central Bank for funding.