Greece debt crisis: ECB tightens screw on Greek banks - live updates

[brooklynite]

Source: The Guardian

Finally, the European Central Bank has announced its decision on the emergency support it provides to Greek banks.

And the 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, that probably means the ECB is treating Greek assets as riskier, and valuing them as such when it calculates how much liquidity it can provide.

It’s another tightening of the screw on Greece - meaning some banks may find it even tougher to qualify for emergency liquidity assistance.

Read more: http://www.theguardian.com/world/live/2015/jul/06/greek-referendum-eu-leaders-call-crisis-meeting-as-bailout-rejected-live-updates

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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.

[Yo_Mama]

1. Thanks. n/t

[24601]

2. When you owe the bank $1000 and can't pay, you have a problem. When you owe $100 Billion and can't

pay, it's the bank that has the problem.

Greece eventually ran out of Gemany's and France's money. Oops, good luck collecting on that. On the other hand, Greece shouldn't expect anybody else to be eager to loan even money when they have already demonstrated they won't pay it back.