Greek banks get more funds as ECB weighs tougher collateral rule1 min read . Updated: 29 Apr 2015, 04:34 PM IST
The ECB has signalled that access to the funds may prove more difficult as talks remain deadlocked
Frankfurt/Athens/Valetta: The European Central Bank raised the amount of emergency liquidity available to Greek banks after signalling that access to the funds may become more difficult as talks remain deadlocked.
The governing council lifted the cap on Emergency Liquidity Assistance by €1.4 billion ($1.5 billion) to €76.9 billion in a telephone conference on Wednesday, people familiar with the decision said. That follows an increase of about €1.5 billion last week. An ECB spokesman declined to comment.
With no speedy deal between Greece and its creditors in sight, the ECB is studying measures to rein in ELA funding to reduce the risks should political talks falter. Staff have proposed increasing the discounts imposed on the securities banks post as collateral when borrowing, and the governing council may discuss the issue at its 6 May meeting.
Intended to counter deposit outflows, ELA is provided by the Greek central bank at its own risk, and against lower-quality collateral than the ECB accepts.
Time is running out for Greek Prime Minister Alexis Tsipras as pensions and salaries loom at the end of the month and the International Monetary Fund awaits payment of almost €1 billion in the first half of May. After euro area finance ministers failed to reach a deal at a 24 April meeting in Riga, Tsipras signalled that he may ask voters to approve an agreement with creditors that may not be in line with his campaign pledge to end austerity. Bloomberg