Breaking: ECB SUSPENDS USE OF GREEK BONDS AS COLLATERAL...

FRANKFURT, Germany—The European Central Bank has suspended the use of Greek government bonds by banks as collateral to get loans from the central bank.

The temporary step comes as Greece goes into a temporary default while it carries out a debt reduction negotiated with its creditors


[link to www.boston.com]

No big deal, this was expected!


The ECB explained that by the middle of next month it would start to accept the bonds again, because a programme for eurozone nations to provide supplementary collateral to insure the ECB against losses is due to come into effect.

Are you retarded?

But it is OK to use them a toilet paper.

like they considered them collateral in the first place.

The remedy for this situation is obvious, even if getting from here to there may not be simple. The peripheral countries have to regain competitiveness by having their prices fall relative to prices in the core countries. If these countries still had their own currencies, this could be accomplished quickly through a devaluation of the currencies of the peripheral countries.

However, being part of the eurozone rules out this option. With a single currency the only route for the peripheral countries to regain competitiveness is to have a lower inflation rate than the core countries.

This would be a doable task if the core countries were prepared to run inflation rates in the range of 3-5 per cent annually. If the peripheral countries kept their inflation rates in a range of 1-2 per cent, they would soon be able to restore their competitiveness.


[link to www.aljazeera.com]

Exactly.

No doom.

Nick®

This should have triggered a 'credit event'.

FAIL

They were supposed to go off at 1000% yield today.