The Business Times: Greek euro problems may spell trouble for ECB

GOVERNMENTS, bankers and the press have concentrated on Greece's difficulties in servicing and repaying its debt, but a much bigger problem looms. The European Central Bank has lent hundreds of billions of euros to stricken commercial banks that are exposed to the imploding bubble economies of the so-called 'PIGS' nations - Portugal, Ireland, Greece and Spain.
It is absurd that German Cabinet ministers and central bankers proclaim that there should not be one cent of aid for Greece while they keep mum about the tens of billions in indirect financing that flowed to the eurozone periphery countries through the back door. Via its so-called 'liquidity operations', the ECB has been lending massively to the weakest banks against collateral made up of increasingly dodgy mortgage assets