Courtesy of Mish.
It’s difficult keeping up with the news. As soon as I finished Germany’s “Time Pressure” Thesis; Noose Tightens on Europe, significant news on the debt standoff hit the press.
ECB Cancels Acceptance of Greek Bonds as Collateral
An ECB press release today discusses Eligibility of Greek bonds used as collateral in Eurosystem monetary policy operations.
In a nutshell, the ECB unexpectedly and suddenly canceled acceptance of Greek bonds as collateral for liquidity funding unless Greece honors the existing deal.
Until that happens, the Greek central bank, not the ECB, will have to take care of liquidity needs related to runs on Greek banks.
The ECB press release states the situation with little fanfare as follows: “The Governing Council decision is based on the fact that it is currently not possible to assume a successful conclusion of the programme review and is in line with existing Eurosystem rules.“
Brass Knuckles
Reuters reports ECB Cancels Soft Treatment of Greek Debt in Warning to Athens.
The title is silly. When did the ECB ever provide Greece with a “Soft Treatment“?
As I have pointed out, the much abused word “solidarity” has come to mean “Do what we say, or else!”
ECB vs. Novices
…
