–Adds Late Breaking Confirmation/Explanation From ECB
ATHENS (MNI) – Some smaller Greek banks have been gradually shut
out of the European Central Bank’s refinancing operations over the past
few months after their capital was wiped out by the private sector debt
restructuring deal (PSI), Greek government and Eurozone central bank
officials told MNI.
These banks, which include the likes of ATE (Agricultural Bank) and
the Postal Services Bank, have been switched over to emergency liquidity
assistance (ELA) provided by the Greek central bank and are thus still
able to get funding, the officials said. ELA financing comes from the
national central banks, with looser collateral rules than in the ECB’s
operations. But it must still be approved by the ECB Governing Council.
After initially declining to comment on the matter, an ECB
spokesperson later confirmed that some Greek banks “that are severely
undercapitalized as a result of the recent PSI operation” have
temporarily lost access to the Eurosystem’s normal refinancing
operations and moved to ELA.
“Once the recapitalisation process is finalised, and we expect this
to be finalised soon, the banks will regain access to standard
Eurosystem refinancing operations,” the spokesperson said, adding that:
“The ECB/Eurosystem continues to support Greek banks.”
The situation of the banks that have lost access has nothing to do
with E18 billion worth of recapitalization funds, earmarked for four
other Greek banks, which has been stalling for months. As MNI reported
earlier Wednesday, that delay was resolved — after the ECB threatened
to withhold refinancing for those banks — and the E18 billion is now
expected to be disbursed within a week.
The recapitalization money also needs to be approved by the
International Monetary Fund, which is expected to turn its attention to
the issue next week.
–Athens bureau, a_papamiltiadou@hotmail.com
[TOPICS: M$Y$$$,M$X$$$,M$$EC$,MGX$$$,M$$CR$,MT$$$$]
