Greece has asked its banks to prepare for the withdrawal of the unlimited ECB funding.
Greek Bond Spread Is Widest in 4 Months on Finances (Update2) - Bloomberg.com
I wonder if the government has planned how NAMA is going to cope once the ECB withdraws the unlimited repos.Greece’s central bank asked domestic lenders to outline potential funding sources in coming months as the European Central Bank begins to tighten the liquidity it provides to Europe’s banking system, Euro2day reported.
In a letter to the institutions, the Athens-based central bank said Greek lenders as a whole had borrowed amounts that were proportionally greater than other countries in the 16- nation euro area, the Web site said, without saying where it got the information. Greek banks have borrowed a total of 42 billion euros ($63 billion) of the 570 billion euros the ECB has pumped into the system, according to Euro2day.
It is going to quite tricky to roll over €54bn when these facilities have been withdrawn.
“There’s uncertainty about the ECB talking about exit strategies, and this is putting pressure on the weaker countries and that’s mostly Greece and Ireland at the moment,” said Michiel de Bruin, head of European government bonds at F&C Asset Management in Amsterdam. “There’s also uncertainty about next year’s supply, liquidity drying up toward the end of the year, and now we are seeing volatility returning to the market.