The Governing Council of the European Central Bank (ECB) has decided to suspend the application of the minimum credit rating threshold in the collateral eligibility requirements for the purposes of the Eurosystem’s credit operations in the case of marketable debt instruments issued or guaranteed by the Greek government. This suspension will be maintained until further notice.
The Greek government has approved an economic and financial adjustment programme, which has been negotiated with the European Commission, in liaison with the ECB, and the International Monetary Fund. The Governing Council has assessed the programme and considers it to be appropriate. This positive assessment and the strong commitment of the Greek government to fully implement the programme are the basis, also from a risk management perspective, for the suspension announced herewith.
The suspension applies to all outstanding and new marketable debt instruments issued or guaranteed by the Greek government.
The ECB has in effect nullified the influence of the Ratings Agencies and declared that Greek Government debt will be perpetually acceptable as collateral in European Central Bank operations no matter what these Agencies declare.
Now if we could only get our Federal Reserve Board and Treasury Department to give the Ratings Agencies the same treatment here in the U.S. !