ECB's Liikanen points to giving up profits on Greek bonds

(FRANKFURT) - The European Central Bank could give up the profits on its massive holdings of Greek bonds as part of a wider debt bailout for the country, its Finnish member Erkki Liikanen suggested on Thursday.

Asked in an interview published in the Financial Times Deutschland about comments to that effect by ECB chief Mario Draghi last week, Liikanen said: "I don't want to say any more.

"But it's clear that the aim of the (ECB) bond-purchasing programme was to facilitate the transmission of our monetary policy to the markets and not to make profits," said the 61-year-old head of the Finnish central bank.

At a news conference last week, Draghi insisted the ECB would not partially write off its portfolio of Greek government bonds under a debt accord as that would violate ECB statutes but he said the bank might possibly distribute part of its profits to member countries.

Greece's private creditors are being asked to write off about half of the 200 billion euros' ($265 billion) worth of government bonds they hold to help cut the country's total debt burden to a sustainable level.

The ECB has come under pressure to take losses on the Greek government bonds it holds, too, as the restructuring by private creditors is unlikely by itself to bring down Greece's debt to the target of 120 percent of GDP in 2020 from 160 percent at present.

But Draghi dismissed such a scenario as tantamount to "monetary financing," whereby a government in effect prints money to boost liquidity.

Nevertheless, Draghi did leave the door open to contributing any profits the ECB made on its Greek bond holdings.