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New Membro
The European Central Bank's bonds will be exchanged for new ones but it is likely to be exempt from the restructuring and will be repaid in full. This has angered private investors. The ECB's profits will be recycled back to eurozone governments, though.
Exempting the ECB could trigger debt insurance contracts, known as credit default swaps, some analysts say. This could weaken the euro.
"It may appear that the ECB is receiving preferential treatment, raising questions about whether the ECB is senior to private-sector bondholders," said Chris Walker, a foreign exchange strategist at UBS. "If a coercive default does indeed eventually take place then a CDS event seems very likely with all the negative consequences for risk appetite that may bring."
How does Greece's debt swap work? | World news | The Guardian
Exempting the ECB could trigger debt insurance contracts, known as credit default swaps, some analysts say. This could weaken the euro.
"It may appear that the ECB is receiving preferential treatment, raising questions about whether the ECB is senior to private-sector bondholders," said Chris Walker, a foreign exchange strategist at UBS. "If a coercive default does indeed eventually take place then a CDS event seems very likely with all the negative consequences for risk appetite that may bring."
How does Greece's debt swap work? | World news | The Guardian