Greek Banks Backed by ECB

Greek Banks Backed by ECB with The European Central Bank approving €68.3 billion as a two-week extension on emergency liquidity for Greek banks.

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The ECB had already raised the total amount of funding available to Greek banks through emergency loans, known as Emergency Liquidity Assistance (ELA), to €65 billion. So, Greek banks will be funded with €3.3 billion.

Greece’s central bank had requested an extension of about €10 billion in need for emergency liquidity. Meanwhile, €300 – €500 million is withdrawn daily from Greek banks. Since December, clients have taken about €20 billion from their accounts which make up over 10% of total deposits in the country.

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A size of bank deposits contracted 2.4% to €160.3 billion in December compared to November. Recently, the ECB rejected Greek government bonds as security for loans. Athens submitted a request for a six-month extension of the bailout program to Brussels.

There was a scenario that the request could be denied. Greece’s creditors expected the newly elected government to sign the agreement on the bailout program expiring at the end of February.

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