ECB re­duces level of emer­gency liq­uid­ity

Kathimerini English - - Front Page -

The Euro­pean Cen­tral Bank re­duced the max­i­mum level of emer­gency aid avail­able to Greek banks in a sign the coun­try’s fi­nan­cial ten­sions are eas­ing af­ter a res­cue pack­age was agreed with cred­i­tors. In a con­fer­ence call on Tues­day, the ECB’s Gov­ern­ing Coun­cil de­cided to cut the ceil­ing on emer­gency liq­uid­ity as­sis­tance pro­vided by the Bank of Greece to 89.7 bil­lion eu­ros ($98.9 bil­lion) from 90.4 bil­lion eu­ros, ac­cord­ing a per­son fa­mil­iar with the de­ci­sion. The move is the first such re­duc­tion since lenders were forced to rely on the fa­cil­ity in Fe­bru­ary. Un­der the terms of a third in­ter­na­tional res­cue for the coun­try agreed this month worth as much as 86 bil­lion eu­ros, Greece’s stricken lenders are in line for up to 25 bil­lion eu­ros in re­cap­i­tal­iza­tion funds. As the coun­try lurched close to a de­par­ture from the euro this year, lenders suf­fered cap­i­tal flight and de­te­ri­o­rat­ing col- lat­eral qual­ity, push­ing them to tap the Bank of Greece for emer­gency fund­ing. The Greek cen­tral bank asked the ECB to lower the ceil­ing for ELA, cit­ing im­prov­ing liq­uid­ity con­di­tions, the per­son said, ask­ing not to be named as such de­ci­sions aren’t public. While the aid is tech­ni­cally pro­vided by the Bank of Greece, its use is be­ing re­viewed ev­ery two weeks by the ECB. An ECB spokesman de­clined to com­ment.

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