No more liquidity from the ECB to the Greek banks
No more liquidity from the ECB to the Greek banks
The pressures on the Greek banks are increasing after the decision by the ECB to stop accepting from July 25 "Greek government bonds as collateral for refinancing, due to the expiry of the program of negotiable securities issued or fully guaranteed by the Greek State."
UPD:
The
pressures on the Greek banks are increasing after the decision by the ECB
to stop accepting from July 25 "Greek government bonds as collateral for
refinancing, due to the expiry of the program of negotiable securities
issued or fully guaranteed by the Greek State."
The Greek banks’ access to the ECB stops next Wednesday and the only source of liquidity will be the temporary mechanism of the Bank of Greece (Emergency Liquidity Assistance - ELA).
As the European Central Bank announced, "due to the expiration of the repurchase scheme on July 25, 2012, bonds issued or guaranteed by the Greek government will become temporarily ineligible for use as collateral for monetary policy operations within the Eurosystem." But it adds that "after the Troika evaluation on the progress of reforms in Greece, the acceptance of Greek government bonds as collateral will be reviewed."
In practice, the ECB is taking its turn putting pressure on the Greek side in view of the expressed intention of the government to proceed to the renegotiation of the memorandum, as it explicitly links the further funding of Greek banks with the Troika’s assessment, which will determine the fate of the adjustment program, namely the fate of further international assistance to Greece.
UPD:
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