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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