Market liquidity

Greece’s central bank on Sunday is expected to request that the European Central Bank raise the ceiling on the Emergency Liquidity Assistance funds for battered Greek banks.

Greek government and banking officials are scrambling to find a solution to the country’s suffocating banking system under immense pressure. Reports say the Bank of Greece (BoG) is expected to submit an official request to the ECB for an increase in liquidity.

Louka Katseli, Chair of the Greek Banking Association, told private SKAI TV that if there is no solution to Greece receiving Emergency Liquidity Assistance (ELA) from the European Central Bank, then Greek banks would have a problem by Monday.

The four largest Greek banks have failed and would also have defaulted had capital controls not been imposed at the outset of the week, due to deposit withdrawals and the ECB’s decision not to raise the Bank of Greece’s (BG) Emergency Liquidity Assistance (ELA) ceiling, says Fitch Ratings.

 In wake of MPs approving plebiscite, gov't agrees to emergency measures after ECB decides not to lift limit on liquidity

The European Central Bank has decided to maintain its Emergency Liquidity Support towards the Greek banking system, although no extra liquidity was provided.

In a statement, the ECB said its board decided to maintain the ELA ceiling at Friday’s limit of 89 billion euros.

The BBC has reported that the European Central Bank’s governing council, which is convening on Sunday, is expected shut down the Emergency Liquidity Assistance (ELA) mechanism for cash-strapped Greek banks.
The media outlet quotes “well-placed sources”.

The European Central Bank has maintained emergency liquidity for Greek banks at the same level as Friday, it said in an announcement on Sunday.

The Governing Council of the European Central Bank will meet on Sunday to evaluate liquidity conditions in Greek banks and decide if it will increase the ceiling of funding available through emergency liquidity assistance (ELA) mechanism.

By Yiannis Papadoyiannis

The banking market is showing signs of returning to normal, at least on the crucial deposits front, as bank clients appeared calmer the last couple of days at the prospect of an agreement between the government and its creditors.