The Bank of Greece has submitted a request to the European Commission’s Directorate-General for Competition for Attica Bank to draw cash from the emergency liquidity assistance (ELA) mechanism through the issue of Greek state bonds that will be used as collateral.
The central bank’s request was submitted in cooperation with the European Central Bank and is based on the process for strengthening the liquidity of the banking system that is available to the systemic banks in the context of a law dating from 2008, known as the Alogoskoufis Law, after the then finance minister Giorgos Alogoskoufis.
Attica Bank will use cash from this mechanism after Alpha, National, Eurobank and Piraeus Bank have already done so. Piraeus is the only bank that has repaid those bonds to date.
According to sources, the amount of ELA remaining for Greek banks ranges between 380 and 400 million euros, but the precise sum to be allocated to Attica Bank depends on how much it requires, as well as on the approval of the eurozone authorities.
The move is aimed at enhancing the liquidity of the bank that in the last month has been reduced due to negative developments at the lender, resulting in a drop in its deposits.