Greek central bank asks ECB to allow emergency bank lending line if needed
Reuters
Published Jan 17, 2015 08:09AM ET
Updated Jan 17, 2015 09:10AM ET
Greek central bank asks ECB to allow emergency bank lending line if needed
By George Georgiopoulos
ATHENS (Reuters) - Greece's central bank has moved to protect its banks from any fallout from the coming general election, asking the European Central Bank to approve a stand-by domestic emergency funding line, a Bank of Greece official said on Saturday.
The move comes after two major banks applied to be able to tap an emergency liquidity assistance (ELA) window on Friday as Greeks withdraw cash before the snap election on Jan. 25.
"We have sent a request to the ECB on ELA approval for all four major banks to have a shield for the banking system," the official said, declining to be named.
"It is up to each bank to decide whether it will use the funding line," the official added without providing further details.
Greece's radical left-wing Syriza party is leading in polls. It wants to end austerity and renegotiate debt with its European partners.
Under ELA, national central banks can lend to commercial banks but have to get approval from the ECB to do so.
Greek banks relied on it heavily at the peak of the debt crisis in 2012 but had repaid it by early last year.
On Friday, executives at Eurobank (AT:EURBr) and Alpha Bank (AT:ACBr) said their banks' requests for an ELA funding line were precautionary and partly related to their exposure to Swiss franc mortgages.
National Bank (AT:NBGr), the country's biggest lender by assets, has no plans to tap ELA as it has sufficient collateral to draw cheaper funding from the ECB if needed, its spokesman said.
Second-largest lender Piraeus Bank (AT:BOPr) does not expect it will need to do so either, a senior executive at the bank told Reuters.
"We are not planning to use ELA funding," the senior executive said, declining to be named.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.