April 16, 2010 / 11:03 AM / 10 years ago

ECB's Trichet says Greek bank worries could worsen

European Central Bank (ECB) President Jean-Claude Trichet reads some documents at the start of Eurogroup meeting in Madrid April 16, 2010. REUTERS/Sergio Perez

MADRID (Reuters) - European Central Bank President Jean-Claude Trichet told euro zone finance ministers that the situation for Greek banks remains difficult and could deteriorate further, according to a speech text seen by Reuters.

Trichet said the Greek banking system was availing itself of the liquidity provided by the ECB and national central banks while the recent changes to rules on accepting assets as security in exchange for loans removed the risk banks would no longer be able to use government bonds as collateral.

The ECB will keep accepting BBB-rated debt next year in a boon for Greece, and will exempt government bonds from new risk penalties on lower-rated assets.

“Still the liquidity situation of Greek banks remains difficult and could deteriorate,” said Trichet, who was meeting the euro zone ministers on Friday in Madrid.

Trichet also said market worries remained after an aid package announced last week to help Greece.

“Despite the commitments expressed in the statements by the euro area heads of state and governments on 25 March and Eurogroup on 11 April and the determination signalled by the Greek government to implement the announced adjustment measures for 2010, financial market tensions are persisting.”

Reporting by Nigel Davies, editing by Dale Hudson

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