ECB opposes Greek plan to roll over bonds -paper
ATHENS Oct 16 (Reuters) - The European Central Bank disagrees with Greece's plan to roll over bonds due next year to partly plug a funding gap because this would negatively impact the capital adequacy of two of the country's big banks, daily Kathimerini reported on Wednesday.
Looking for ways to cover a funding shortfall of nearly 11 billion euros in 2014-15, Greece has come up with a plan to roll over about 4.5 billion euros of bonds issued in 2009 as part of liquidity support to its banks during the global credit crisis.
But the ECB opposes the idea as a rollover would bring the Core Tier 1 capital ratio of two of Greece's four top banks below a required 9.0 percent, meaning a need for additional capital, the paper said citing unnamed sources.
"Frankfurt claims that plugging the funding gap via a rollover would be pointless as this would create new capital needs," the paper said.
Under its latest bailout programme, Athens will be financed until the second half of 2014, when it hopes to tap the bond markets, from which it has been cut off since 2010.
The bonds, which mature in March, were given to banks in exchange for preferred shares.
Greece's top four banks - National, Piraeus , Alpha and Eurobank - were recapitalised with 27.5 billion euros in June to shore up their capital bases after losses from a sovereign debt writedown and bad loans.
Eurobank and National Bank have emerged with Core Tier 1 ratios of 8.1 and 9.2 percent, respectively, after their recapitalisation.
Citing an unnamed EU official, Kathimerini said the view from Brussels is that the EU Commission is willing to discuss the proposal but the rollover would not be able to fly without the ECB's approval. (Reporting by George Georgiopoulos; Editing by Catherine Evans)
- Air strike kills 15 civilians in Yemen by mistake: officials
- North Korea executes leader's powerful uncle in rare public purge |
- Insight: In Yemen, al Qaeda gains sympathy amid U.S. drone strikes
- Storm to cloak Midwest to Northeast in snow, freezing rain
- Twitter backtracks on block feature after users revolt |