ECB restores use of Greek bonds as collateral

AP News
Posted: Dec 19, 2012 8:35 AM

FRANKFURT, Germany (AP) — The European Central Bank says it will once again accept Greek government bonds as collateral for loans to banks.

The move is important because parking such bonds with the ECB in return for loans is an important way for Greece's shaky banks to get the money they need to keep operating.

The central bank for the 17 euro countries announced the step after Standard & Poor's changed Greece's credit rating from default to B-, still below investment grade. The ECB had stopped accepting Greek bonds as collateral in July when the country held a debt swap to reduce what it owed to creditors.

The ECB cited Greece's progress in fixing its finances and economy.

Greece still depends on bailout loans from other eurozone countries to keep paying its obligations.