ECB Considering Helping Greece With Holdings

The European Central Bank is considering new ways to help reduce Greece's funding gap by using the Greek debt in its investment portfolios, three euro- area officials said.

The national central banks of the euro area hold Greek bonds in their investment portfolios and agreed in February to give any profits back to Greece. The issue has been reopened and the ECB is now looking at options including rolling over the holdings or allowing the Greek government to buy them back, the officials said yesterday on condition of anonymity.

There are between 10 billion euros ($13 billion) and 15 billion euros in the portfolios, one official said. The amount saved by Greece would be considerably less than the overall value of the holdings, the person said. An ECB spokesman declined to comment on whether such plans are under discussion.

Euro-area finance ministers were meeting in Brussels last night in the third attempt this month to plug Greece's funding shortfall. The impasse is holding up the next bailout payment to Athens and, as they have done so often during the sovereign debt crisis, governments are once again turning to the ECB for help. ECB President Mario Draghi attended last night's meeting.

via Bloomberg