FXStreet (Barcelona) – Research Analysts at Deutsche Bank, offer their observations on ECB’s exposure to Greece through provision of the financial support programme.
Key Quotes
“The impact on the Eurozone creditors of the ECB exposure to Greece is the trickiest to assess….the exposure of the ECB to Greece could be as much as ~EUR 128bn if we take into account the full amount of GGB holdings and Target2 liabilities.”
“The ECB currently has capital & reserves and revaluation reserves of EUR 98bn and EUR 404bn respectively. Therefore, it should have the capacity to withstand any losses due to its exposure to Greece without any further capital calls on the NCBs (who may in turn make a capital call on their respective governments). Even if the ECB were to make a capital call rather than write down its revaluation reserves it can afford to do so over a number of years rather than an immediate up front capital call. The call on the national governments would result in the need for governments to raise additional funds and raise their government debt levels.”
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