It is worth taking a quick looks at these National Bank of Greece bonds. 1.925 billion Euro were issued in June 2011. Of course the underwriter was NBG itself, and the “Collateral Type” is “Govt Liquid Gtd”. I do not know for certain, but I suspect that NBG issued the bonds to themselves, got a Greek government guarantee (for whatever that was worth back in June) and then took these bonds to the ECB to post as collateral for some money. So no one would take Greek debt, but the debt of this bank with a government guarantee was perfectly good for the ECB. The issue is that if Greece defaults, then how can the guarantee remain good? If the guarantee isn’t good, the ECB will have to change its rules in order to keep NBG alive. Just one example of why ECB wants a “voluntary PRIVATE SECTOR” deal.