ECB lowers emergency funding cap for Greek banks to 32.6b euros

[ATHENS] The European Central Bank (ECB) lowered the cap on emergency liquidity assistance (ELA) Greek banks draw from the domestic central bank by one billion euros (S$1.6 billion) to 32.6 billion euros, the Bank of Greece said on Thursday.

The move reflected improved liquidity conditions, taking into account private sector deposit flows, it said. The ELA ceiling is valid up to Oct 26.

Greek banks have relied on emergency liquidity assistance (ELA) since February 2015 after being cut off from the ECB's funding window. Emergency funding is more costly than borrowing directly from the ECB.

In June last year the ECB reinstated Greek banks' access to its cheap funding operations, allowing lenders to reduce their dependence on the emergency liquidity lifeline.

ELA funding to Greek lenders dropped by 3.7 billion euros, or 11 per cent, to 30.9 billion euros in August compared to the previous month.

REUTERS