The European Central Bank’s (ECB) Governing Council recently
granted a request from the Bank of Greece to further reduce the emergency aid
mechanism in liquidity (ELA) to $49.83 billion.
The Bank of Greece advocated for the $2.15 million
reduction in the ELA on the grounds of improved liquidity in the country’s
banks, as well as the generally improved state of private sector deposit flows,
which have seen increased certainty and consolidation. The Bank of Greece also
cited reduced borrowing costs for financial institutions in the country, coming
after a June ECB decision that allowed the banks to access to cheap direct
financing again.
