ECB extends ELA limit by 500 mln euros
The European Central Bank on Tuesday ensured it maintained Greek banks’ 3-billion-euro safety cushion of unused cash by extending the Bank of Greece’s emergency liquidity assistance (ELA) limit by half a billion euros.
Frankfurt responded to the request by the country’s central bank to offset the significant outflow of deposits recorded in the past week and stretched the ELA limit from 80.2 billion euros to 80.7 billion, after leaving it unchanged last week.
Two weeks ago the ECB had marginally increased the ELA limit by just 200 million euros, but local bank officials said that depositors withdrew much more than 1 billion euros from their accounts last week, while the decline in the balance since the start of the year has exceeded 30 billion.
Sources from Tuesday’s ECB meeting said that while some board members’ demands for an increase in the haircut on the collateral that Greek banks use to draw liquidity was discussed again, Frankfurt decided against making a decision in that direction, postponing it until next week.
