Athens awaits ECB 'green light' allowing Greek banks' exposure to bond markets

Wednesday, 18 December 2019 11:51
UPD:11:55
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A request by Athens towards the European Central Bank (ECB) to lift restrictions on Greek banks' exposure to bonds issued by the Greek state appears likely to be approved, with the issue brought up along with "laundry list" of other matters discussed on Tuesday in Frankfurt by new ECB chief Christine Lagarde and visiting Greek PM Kyriakos Mitsotakis.  

Lifting the restrictions on Greece's thrice bailed-out systemic banks aims to increase investment options, and by extension, much-needed liquidity for the latter. At present, negative interest yields are offered for "parking" capital with the ECB.

Secondly, allowing Greek banks to again enter the bond market will lead to further downward pressure on yields offered by Greek state debt, something that also benefits a recovering economy and the latter's fiscal prospects.

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