Greek banks solvent at the moment, ECB’s Jazbec says

Greece’s banks are not at risk of insolvency at the moment, European Central Bank Governing Council member Bostjan Jazbec told German daily Handelsblatt in an interview published on Wednesday.

The ECB has authorized Greece’s national central bank to provide the country’s lenders with some 60 billion euros ($68 billion) in emergency liquidity assistance (ELA), people familiar with the matter have told Reuters.

The ECB canceled its acceptance of Greek bonds in return for funding last week, shifting the burden onto Greece’s central bank to finance its lenders.

“The decisions on ELA are reviewed every two weeks. At the moment, the solvency of the Greek banks is not in danger,” Jazbec said.

Asked whether a situation could arise when the ECB would stop ELA provision, Jazbec replied: “There is always this risk. That it why it is important to watch it closely.

“I am convinced that the Greek banks and the central bank will do everything to avert dangers to the financial system,” he added.

The ECB’s Governing Council next gathers on Feb. 18 for a non-monetary policy meeting. [Reuters