Greek banks will keep receiving the same amount of emergency central bank aid despite a reduction in the amount of treasury bills they can offer in exchange, a euro-area central bank official said on Tuesday.
The European Central Bank’s Governing Council last week allowed a temporary increase in the amount of T-bills Greek banks can pledge for so-called Emergency Liquidity Assistance to lapse, reducing it to 3.5 billion euros from 7 billion euros, said the official, who was briefed on the decision.
However, other acceptable collateral including asset-backed securities on banks’ balance sheets have increased in value enough to make up the difference, he said.
Greece on Tuesday sold a total of 4.06 billion euros of four-week and 13-week T-bills before a redemption of 5 billion euros of similar securities on Friday.
After the ECB’s decision to reduce the total amount of T-bills acceptable as collateral, banks could have faced funding difficulties unless they were able to find other acceptable collateral.
Overall, Greece is trying to plug a financing gap of as much as 32.6 billion euros.