FRANKFURT (MNI) – The potential lending capacity of the European
Financial Stability Facility will be raised to E440 billion, EFSF chief
executive officer Klaus Regling told reporters on Monday.
“This will be done by raising the guarantee amount – the sum of all
the guarantees from the euro area members states – from E440 billion
today to E780 billion in the future,” Regling explained at a joint press
conference alongside European Economic and Monetary Affairs Commissioner
Olli Rehn and Eurogroup Chairman Jean-Claude Juncker.
Regling also noted that the “over-guarantee” would be raised from
the current level of 120% to 165%.
“By raising the over-guarantee, we will make the EFSF more
efficient,” he continued. “We can eliminate the cap reserve and
therefore also overborrowing, which was necessary as a credit
enhancement to protect bondholders and to obtain triple-A ratings.”
[TOPICS: M$G$$$,M$X$$$,MT$$$$,MFX$$$,MGX$$$,M$$CR$]
