ATHENS: The European Central Bank approved the smallest rise in emergency cash for Greece lenders since tensions re-emerged in February, a sign that deposit outflows may be easing as political talks on the nation’s finances improve. At a meeting in Frankfurt on Wednesday, the Governing Council consented to a 200 million-euro ($222 million) increase in the cap on Emergency Liquidity Assistance to €80.2 billion, people familiar with the discussion said.
No decision was taken to alter the discounts applied to the collateral pledged for the Bank of Greece loans, the people said, asking not to be named as the matter isn’t public. With European leaders due to engage with Greek Prime Minister Alexis Tsipras at a meeting in Riga, Latvia, on Thursday, the euro’s monetary guardians are taking their lead from political discussions over the nation’s bailout.
While the ECB isn’t giving Greece’s lenders more leeway than it judges they need, officials are aware that tightening the squeeze could worsen the crisis just as talks show signs of progress. “The ECB keeps Greek banks’ liquidity on a tight leash, leaving a rather constant headroom compared to the amount actually drawn,” analysts at Athens-based Pantelakis Securities wrote in a note to clients today, adding that the small increase may indicate a slowdown in money leaving banks.
