ECB reportedly leaves ELA cap on Greek banks unchanged

The European Central Bank (ECB) reportedly left the ceiling on emergency liquidity assistance to Greek banks unchanged at €80.2bn.

It marked the first time the ECB has held back since February and followed a weekly review, a banking source told Reuters.
The source said the ceiling was not raised because deposit outflows had slowed to low levels.

"This leaves an unused liquidity buffer of €3bn," the banking source said. "The reason for not raising the ceiling was that deposit outflows stabilised at very low levels."

The ELA programme has been holding up Greek banks as the country’s government continues to struggles to make a deal with creditors to unlock further aid.

The ECB had been raising the limit on ELA in increments but concerns that such a move is financing the Greek government has prompted opposition within the monetary authority.

The ECB declined to comment.

Berenberg analyst Christian Schulz said deposit outflows have re-accelerated according to some Greek media reports which “may not threaten the immediate liquidity position of Greek banks, who last week were said to have an ELA buffer of €3bn”.

“But there are two reasons for concern. (1) The minority in the ECB who are openly worried about the impact of the deepening Greek recession on Greek banks solvency seems to be growing and putting pressure on the majority to limit the risks to the institution. (2) With no clear data about banks’ liquidity position available, the unchanged ELA limit could trigger more concerns by Greek households and companies about potential capital controls and thus trigger accelerated withdrawals.”