ECB Discounts Gov’t 10-yr Debt to 29% of Face Value

Euro-Symbol - 5

The deal at the ECB shows what they themselves think of government debt. They are accepting Cypriot bonds as collateral for loans. At the ECB, a 10 year bond of a member is discounted to 29% of its face value. Interesting how the ECB does not consider government debt as really “quality” for borrowing.

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