ATHENS--In an effort to shield Greek banks from the recent
turmoil in financial markets, the European Central Bank has decided
to boost the liquidity available to Greek lenders who still depend
on the ECB for their cash needs.
According to a Greek central bank official, the decision was
reached late Wednesday between the ECB, the Greek central bank and
the Greek government following a meeting in Frankfurt attended by
Bank of Greece Governor Yannis Stournaras.
Specifically, the ECB has decided it would give Greek banks more
cash in exchange for the collateral they now pledge to Europe's
central bank. The decision could translate into an additional 12
billion euros ($15.2 billion) for Greece's four big systemic
lenders: National Bank of Greece SA, Piraeus Bank SA, Eurobank
Ergasias SA and Alpha Bank AS.
Greece's banks have been hit especially hard in the last few
days amid turmoil in European equity and bond markets, with the
banks sub-index in Athens closing more than 7% down on Wednesday.
According to the latest data, Greek banks borrowed some EUR45
billion from the ECB last month.
Investors have grown particularly anxious about Greece in recent
weeks as the country has moved to exit its bailout program ahead of
schedule and amid growing speculation over snap elections early
next year.
Write to Alkman Granitsas at alkman.granitsas@wsj.com
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