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ECB Holdings of Peripheral Sovereign Bonds under the SMP

This post was written by Philip Lane

The SMP data have been released - here.  ECB holds euro 14.2 billion of Irish bonds (at face value).

This entry was posted on Thursday, February 21st, 2013 at 8:47 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

6 Responses to “ECB Holdings of Peripheral Sovereign Bonds under the SMP”

  1. Fiatluxjnr Says:
    February 21st, 2013 at 9:07 pm

    Italy at 102b is a bit of an eye opener. Good to see they will make over half a billion from us if they hold on for about four years. Will they give the profits back?

  2. David O'Donnell Says:
    February 21st, 2013 at 9:28 pm

    Modest enough compared to the Trillion tossed ~0 to the FINANZSYSTEM.

  3. colm mccarthy Says:
    February 21st, 2013 at 11:24 pm

    Fiatlux:

    No. The profits go into the ECB surplus, get distributed to the NCBs according to the capital key and the NCBs then remit to their governments. The Irish NCB gives 80% of its surplus annually to the govt.

  4. Carson Says:
    February 22nd, 2013 at 9:39 am

    That is apart from Greece I believe which will get the profit returned directly to its exchequer as part of its latest bailout deal.

  5. Bryan G Says:
    February 22nd, 2013 at 7:25 pm

    @Carson

    Even in the case of Greece, the money is first distributed to the NCBs, who then give it to their governments. These governments then give it to Greece. This was a Eurogroup decision. Structured this way, no mortal sins of monetary financing are being committed.

  6. Bryan G Says:
    February 22nd, 2013 at 8:10 pm

    To give a fuller picture of this

    - there are two categories of official sovereign debt holdings - those held by the ECB/NCBs on behalf of the Eurosystem itself (SMP) and those held by individual NCBs for their own account (ANFA)

    - there are two ways in which a country can benefit - return of profits (coupons, principal over discounted purchase price) and guaranteed rollover (reduces future capital market issuance needs)

    I think there are thus at least 4 different ways Ireland could attempt to gain here from a “deal” on OSI holdings

    - return of SMP profits
    - rollover of SMP holdings (into OMT, since SMP has been ended)
    - return of ANFA profits
    - rollover of ANFA holdings

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