The European Central Bank will continue to accept Greek debt as collateral for loans

  • The ECB’s continued support for Athens is crucial given that Greek banks are almost entirely dependent on the European central bank for funding. Analysts had feared that the ECB’s seemingly tough Greek stance could lead to the collapse of the Greek banking system, whose borrowings from the ECB topped €100bn ($145bn) last month.
    • The ECB would rely on the principle of using the best rating available from the agencies – Standard & Poor’s, Moody’s, Fitch and their smaller Canadian rival DBRS – the official said. The comments came after S&P on Monday became the first agency to warn that a plan, pushed by France and endorsed by Germany, for banks to roll over their holdings of Greek debt into new bonds would constitute a “selective default”

    • the judgment on behalf of the four dissenting judges, said that while there were questions about the validity of the suit as a class a

    •  The European Central Bank will continue to accept Greek debt as collateral for loans unless all four credit rating agencies it uses declare it to be in default, said a senior finance official.

    • French and German officials said they were not unduly concerned by the S&P statement. They underlined that a rollover was unlikely to constitute a so-called credit event, which would trigger payments on credit default swaps, a form of insurance against default.  

       

          “The important thing is that we avoid a credit event, with all the resulting negative impact on credit-default swaps which occupied us after the Lehman bankruptcy,” a German official said.

    • Walmart succeeded by squeezing costs out of every aspect of its business, from the real estate it developed to its trucking fleet to the wholesale prices it paid for toothpaste and the wages and benefits it paid to employees. These savings were turned into low prices for shoppers and profits for the company’s shareholders. If there is beauty in efficiency, then Walmart is the Sistine Chapel of business.

    • Walmart lobbied for years to create a flexible, low-cost labour environment, without the inconvenience of unions. Politicians gave it what it asked for. But when a company is allowed to rid itself of unions to grow more aggressively, it is expected to repay that trust by treating workers fairly.

    • Investors said DBRS had a reputation of often being late to downgrade countries.

    •  Fitch, the third-largest rating       agency, has also indicated it is likely to call a rollover a default. But Moody’s and DBRS have yet to comment.

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