Someone suggested that the ECB actually didn’t take the NBG bonds as collateral, but that the Greek Central Bank did. Where or how the Greek Central Bank got their hands on some Euros for NBG I don’t know, but suspect they got it from the ECB or other central banks via the “target2” facilities.
This is so convoluted (i mean complex) that it makes my head hurt. The desperation to stop an actual default from occurring and keeping “governments” “central banks” and “public institutions” from taking a loss is clear.
Still waiting for what the downgrades are and what the new EFSF will be, but in meantime I think market is finally starting to also think about what the implications of a Greek default will be, and triggering CDS is the least of the problems.