European Central Bank funding to Greek banks rose 47 percent in January from a month earlier, Greek central bank data showed on Tuesday, as deposit flight squeezed liquidity and forced the country’s lenders to increase their borrowing from the ECB.
ECB lending to Greek banks against collateral rose to 82.24 billion euros in January from 56.04 billion euros in December.
Jitters over a standoff with Greece’s eurozone partners ahead of the general election led to deposit outflows of 12.2 billion euros in January, according to ECB data.
The sharp drop in deposit balances, coupled with purchases of state T-bill issues and the refusal of foreign banks to renew repo lines, forced Greek lenders to draw emergency liquidity assistance (ELA) from the Bank of Greece.
ELA funding reached 5.2 billion euros in January from nearly zero in December, the data showed.