No worries about the possible end of the waiver

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While the consensus among analysts is that the European Central Bank will extend the exemption of Greek sovereign bonds from the rule prohibiting low-grade bond purchase program ratings, even though this exemption has disappeared, it should not apply. no problem for Greece, economists tell Kathimerini.

Nondas Nicolaides, Vice President and Senior Credit Officer at Moody’s Investors Service, said: “We see minimal risks if the ECB does not extend the waiver, as only part of the ECB funding of Greek banks is through bonds. of Greek states. In any case, this part of the funding can easily switch to the interbank repo market, as was the case before Covid-19, at a slightly higher cost (lower profit given the current negative rates) which would not be not detrimental to banks. “Profitability. “

“The financing prospects of Greek banks should not be jeopardized by such an eventuality, given their large cash position which they can also use to pay any relevant contribution to the ECB. Some banks also have the option of mobilizing other unencumbered collateral eligible for the ECB to replace Greek bonds, thereby minimizing the downside risks to their funding profile. At the same time, we expect customer deposits to continue to grow robustly and that banks increasingly exploit international capital markets, which will also reduce the need for ECB funding by Greek banks to here next year, ”he notes.

Cristina Torrella, senior director of financial institutions at Fitch Ratings, adds that “the issuance of unsecured debt, as well as the possibility of resuming secured funding such as pensions, should facilitate the substitution of ECB loans. Three big banks have already issued senior senior bonds and we have also seen issues of subordinated debt. In addition to this, it is also important to mention that the credit profile and credit ratings of Greek banks could improve in the short term if the entities continue to make good progress in their strategic plans, which should further support access and market conditions.

Likewise, Goksenin Karagoz, director of financial institutions at S&P Global Ratings, anticipates that “if the ECB stopped accepting Greek government bonds as eligible collateral, Greek banks would start borrowing from their repo counterparties on condition that the investor sentiment remains positive. We expect the impact on the cost of funding and existing strong liquidity measures to deteriorate. “


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