You are here

Two Greek banks apply for emergency liquidity: central bank source

[ATHENS] Two Greek banks have asked to tap the Greek Central Bank's Emergency Liquidity Assistance (ELA) facility, a central bank official told Reuters on Friday, in a sign that liquidity conditions are tightening ahead of snap polls on Jan 25.

The official did not name the banks or the amount they were seeking.

Greek banks have been funding their liquidity needs from the European Central Bank against collateral, with their total borrowing rising 2.3 per cent to 44.9 billion euros (US$52.5) in November.

But increased deposit outflows since Greece called snap elections, coupled with government T-bill issues have squeezed their liquidity levels.

Market voices on:

Kathimerini newspaper reported on Friday that the banks had asked to tap the ELA for more than 5 billion euros, with other banks expected to follow suit.

The central bank official would not confirm the sums involved. ELA funding is more costly than borrowing from the European Central Bank and will need that body’s approval.

Greeks stepped up bank withdrawals last month when the threat of a government collapse grew, but the money has largely remained in the country with no sign so far of a full-blown capital flight as in 2012, Greek bankers familiar with the matter told Reuters on Thursday.