ECB Raises Emergency Funding To Greek Banks | Independent Newspapers Limited
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ECB Raises Emergency Funding To Greek Banks

Posted: Jul 16, 2015 at 3:03 pm   /   by   /   comments (0)

The European Central Bank (ECB) has hiked its emergency lending to Greek banks, President Mario Draghi, revealed on Thursday, raising hopes that lenders may be able to open their doors after more than two weeks of closures.

Speaking at a regular press conference, he confirmed that the bank would up its funding to lenders in Greece by 900 million euros ($978 million) over one week.

This comes after the Greek parliament voted in favour of an austerity reform package in the early hours of Thursday morning, paving the way for a bailout programme.

The European Central Bank President Mario Draghi at the ECB’s headquarters in Frankfurt said: “We have today accommodated the Bank of Greece request, though scaled to one week. We want to see how the situation will evolve.”

The ECB has helped out the Greek banking industry through Emergency Liquidity Assistance (ELA): a series of loans given to Greek lenders to help with their solvency. The ECB dishes out these loans, but they actually come from the central banks of each individual euro zone country.

Before the extension, the ECB had been maintaining its ELA cap to Greece at 89 billion euros.

Draghi was forced to fend off a heavy round of questioning on the Greek bailout situation and the emergency funding extended to Greek banks, as he noted that debt relief for the cash-strapped country is necessary but said that there was no decision to write down any of Greece’s debt pile.

“There was no decision on haircuts, we have raised it before and we took no decision today,” he said.

“If things continue to proceed in a positive way as they have done in the last two days we will have a phase during the Bank of Greece and the ECB, which are working very actively in monitoring the situation, will look at exactly the needs of the Greek economy..,” Draghi added.

The euro zone’s central bank also opted to keep interest rates unchanged at record lows in an effort to counter deflation, It maintained its asset purchase programme at 60 billion euros-a-month ($66 billion).

“Greece seems bound to dominate Draghi’s press conference when the latest ECB monetary policy meeting concludes this afternoon,” head of economic research at Daiwa Capital Markets Europe, Chris Scicluna, said ahead of the meeting.

Source: CNN