Greek banks’ dependence on ELA drops further

Emergency central bank funding to Greek banks dropped in September compared to the previous month, Bank of Greece data showed on Thursday.

Emergency funding, which is more costly than borrowing from the European Central Bank, dropped to 3.58 billion euros from 4.49 billion euros at the of August, the data showed.

Greek banks have relied on emergency liquidity assistance (ELA) drawn from the central bank since February 2015 after being cut off from the ECB’s funding window due to stalled bailout talks between the government and its official creditors.

Their dependence on the ELA emergency lifeline declined sharply after June 2016, when the ECB reinstated banks’ access to its cheap funding operations.

However, with Athens out of its bailout program since August 21, the ECB has ended the waiver that made Greek government bonds eligible collateral for its cheap funding.

[Reuters]