luis de guindos : interview with ert tv ( hellenic broadcasting corporation ) interview by mr luis de guindos, vice - president of the european central bank, with ert tv ( hellenic broadcasting corporation ), conducted by ms rallou alexopoulou on 3 february 2020 and broadcast ( in part ) on 3 february 2020. * * * the asset purchase programme ( app ) was restarted in november 2019, with no specific expiry date. greece is currently not eligible to participate in the programme. however, fitch upgraded greece ’ s credit rating to bb on 24 january and the outlook is positive. do you think greece could catch up and benefit from the app if it becomes eligible in the course of this year or the next? i think the situation is quite clear. the evolution of the greek economy is positive and i think this is what has been reflected in the upgrades by the rating agencies. so, once greek bonds reach investment grade, which i hope will be sooner rather than later, they will certainly be part of the app. greece still has the highest level of non - performing loans ( npls ) in the eu. the greek government has already launched the “ hercules ” plan in an effort to reduce the stock of npls, and more actions are planned. taking into account the ongoing normalisation of the greek financial sector, what are the prospects for the banks to provide the necessary efficient allocation of credit in greece, with the aim of supporting economic activity and growth? when you look at the progress of the greek economy, you realise that it is performing quite well. greece is outperforming the majority of its peers. i think this is because it has a more competitive economy and its fiscal situation is much better than it was two or three years ago. i think the only problematic aspect of the greek economy is the npl ratio, which is very high – as you know it is above 40 %. this makes it difficult for banks to provide credit to the economy, to lend to households and non - financial corporations. so, we at the ecb are convinced that it is crucial that greece further reduces its npl ratio. and i think that every possible instrument has to be used in order to do that. the hercules plan is an important instrument. we will do our best to support npl resolution. there are currently some legal impediments, but it is crucial that these restrictions are taken into consideration and lifted in order to continue reducing the number of

vitor constancio : margins and haircuts as a macroprudential tool remarks by mr vitor constancio, vice - president of the european central bank, at the esrb conference on macroprudential margins and haircuts, frankfurt am main, 6 june 2016. * * * the footnotes can be found at the end of the speech. ladies and gentlemen, it is a pleasure to speak here today at the esrb conference on macroprudential margins and haircuts. in my view, macroprudential margins and haircuts have the potential to become tools for controlling the build - up of excessive leverage in the financial system. importantly, these tools would reach beyond the banking system and also address the build - up of leverage and liquidity risks in parts of the financial system, where we have seen rapid growth in recent years. before i elaborate further on the specific need for macroprudential margins and haircuts, possible tools and how to implement them, allow me to set a more general stage for the important discussions we will be having and briefly touch upon a key lesson from the history of financial crises. in recent years, convincing evidence has been provided showing that excessive leverage, credit booms and subsequent de - leveraging episodes were at the heart of recurrent episodes of financial instability since the late 19th century. [ 1 ] let me single out two major crises where the build - up of leverage and the subsequent de - leveraging played a key role. first, the stock market bubble of 1927 – 1929 and the subsequent “ great crash ” of 1929 were accompanied by an extraordinary growth followed by contraction of leveraged trading in stock markets, amplified by margin calls. [ 2 ] the ensuing great depression brought real, severe economic consequences. while there is still debate on its ultimate causes, the great crash is widely considered as a major factor. notably, the great crash motivated the establishment of the so - called “ regulation t ” which allowed the federal reserve board to set minimum margins for partially loan - financed transactions of stocks. and from 1947 until 1974, the federal reserve board frequently changed these minimum margin requirements. the evidence on the success of this macroprudential tool in curbing excessive credit in securities transactions and stock market volatility is at best mixed. [ 3 ] importantly, however, the limited scope of regulation t – which allowed investors to avoid its impact by substituting other forms of borrowing for margin loans – has been identified as