Greece crisis European Central Bank hits Greek banks with tougher haircuts

ECB has maintained the cap on emergency liquidity assistance (ELA) at €89bn, but crucially it has “adjusted” the haircuts it applies to the assets which Greek banks hand over in return for funds.

  • Published:
24/7 Live - Subscribe to the Pulse Newsletter!

The European Central Bank (ECB) has finally announced its decision on the emergency support it provides to Greek banks.

ECB has maintained the cap on emergency liquidity assistance (ELA) at €89bn, but crucially it has “adjusted” the haircuts it applies to the assets which Greek banks hand over in return for funds.

In simple terms, the ECB is treating Greek government bonds as riskier, and valuing them as such when it calculates how much liquidity it can provide.

In what is described as another tightening of the screw on Greece, some banks may find it even tougher to qualify for emergency liquidity assistance.

Here is the full statement:

ELA to Greek banks maintained

The Governing Council of the European Central Bank decided today to maintain the provision of emergency liquidity assistance (ELA) to Greek banks at the level decided on 26 June 2015 after discussing a proposal from the Bank of Greece.

ELA can only be provided against sufficient collateral.

The financial situation of the Hellenic Republic has an impact on Greek banks since the collateral they use in ELA relies to a significant extent on government-linked assets.

In this context, the Governing Council decided today to adjust the haircuts on collateral accepted by the Bank of Greece for ELA.

The Governing Council is closely monitoring the situation in financial markets and the potential implications for the monetary policy stance and for the balance of risks to price stability in the euro area. The Governing Council is determined to use all the instruments available within its mandate.

Download our mobile app today.

Android - Google Play Store

iPhone - Apple App Store

Recommended Articles

Recommended Videos





Top Articles

1 Photo Duncan Williams leads prayers at Donald Trump's inauguration servicebullet
2 Gambia Crisis Twitter explodes with rage over Hanna Tetteh's tweetbullet
3 Leadership UN appoints ex-president Mahama to top positionbullet
4 Fired! We will ‘definitely lay off’ people appointed in Mahama’s...bullet
5 Asante Kingdom This is Osagyefo Bayie, the acting Asantehemaabullet
6 Asantehemaa's Death Funeral of Asantehemaa underway [Photos]bullet
7 Francisca Oteng-Mensah 24 year old MP complains about...bullet
8 Gambia Crisis Mixed reactions over President Akufo Addo's...bullet
9 Ministerial Vetting Osafo Marfo explains his Senior...bullet
10 Corruption I'll make sure Opuni goes to jail - Kennedy...bullet

Top Videos

1 Refugee Ghanaian to lose fingers after 7-hour trek to cross US borderbullet
2 In Zimbabwe President Mugabe’s 70 year-old aide marries his...bullet
3 Vitiligo Enam Honya - is challenging what you think about beautybullet
4 Obinim What happen'd when we fact checked Obinim's Bible knowledgebullet
5 Obinim saga We had sex only once - Obinim victims confessbullet
6 Kwame Nkrumah Interchange Water leaks from hole in wall at new...bullet
7 Watch Kumchacha delivers Counselor Lutterodt from 'demons'bullet
8 Woyome Judgement Debt Kweku Baako dances over Amidu's winbullet
9 Video Taxi driver terrified after an encounter with a ghostbullet
10 Bishop Obinim Saga Teenagers disciplined by Obinim...bullet

News