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ECB Allows Greek Banks to Buy More of Country’s Sovereign Debt

Paul Tugwell

(Bloomberg) --

The governing council of the European Central Bank has ended the limit imposed on the exposure of Greek lenders to the country’s sovereign debt, Greece’s Finance Minister said.

The ECB believes that the reasons and conditions that led to the March 2015 decision no longer exist, Christos Staikouras said in an emailed statement, citing rising deposits, the improved macroeconomic environment, the lifting of capital controls and record low Greek financing costs.

The move will benefit Greek banks and the state and is another sign of a return to normality and the strengthening of liquidity in the real economy, Staikouras said.

Prime Minister Kyriakos Mitsotakis and ECB President Christine Lagarde discussed lifting the cap on sovereign holdings during a meeting in December, Bloomberg News reported at the time.

To contact the reporter on this story: Paul Tugwell in Athens at ptugwell1@bloomberg.net

To contact the editors responsible for this story: Sotiris Nikas at snikas@bloomberg.net, James Amott, Nick Rigillo

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