FT Alphaville reports some of today's commentary on Greece from ECB president, Jean-Claude Trichet:'We will not change our collateral policy for the sake of any particular country.'
'No government, no state can expect from us any special treatment; we have our own rules and we will apply them without special treatment of any kind.'
Of course, the last time M. Trichet ran into a conflict between reality and the official version he resolved it simply by deciding to accept covered bonds as collateral for liquidity. Odd that the true beneficiaries of this, Spain and Germany, were the ones with the biggest dependence on this kind of financing and with the biggest mortgage holes in their balance sheets.
Macro Man opines that it is specs that are having a go at Greek debt as we speak. That the euro, currently a tad under $1.45, refuses to even think about taking a run for $1.42 adds some heft to his argument.
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2 Comments:
I don't really get the panic about Greek debt. 300 billion is a big number, but financed at current rates it's not a lot of money.
There's lots of ways to solve the ratings issue (although I'm not sure the any of the ratings agencies have the guts to really piss off any major world governments), the easiest of which would be loan guarantees.
Right it looks like an exercise in making it look like Greece is being punished in order to deter future violaters.
That last bit would be a correct assessment.
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