Greek Banks' Borrowing From ECB Rises Further In June, Hits New High
July 25 2011 - 12:03PM
Dow Jones News
Greek banks further increased their borrowings from the European
Central Bank in June to EUR103.0 billion for the second month
running, hitting a record high, data released by the Greek central
bank showed Monday.
That is up from EUR97.5 billion in May--and EUR86.9 billion in
April--as the banks stepped up their reliance on the ECB's
emergency facility offered to banks in Europe facing liquidity
squeezes.
The previous record was December's EUR97.7 billion.
In May 2010, the Greek government narrowly avoided default with
the help of a EUR110 billion bailout from the European Union and
the International Monetary Fund, but its bonds have since been
downgraded to junk status.
Since then, Greek banks have been effectively frozen out of
European interbank markets amid fears that a Greek sovereign
default would drag down the country's banks.
Greece's four main lenders--the National Bank of Greece SA
(NBG), EFG Eurobank Ergasias SA (EUROB.AT), Alpha Bank AE
(ALPHA.AT) and Piraeus Bank SA (TPEIR.AT)--have all been under
pressure to reduce their dependence on ECB liquidity.
Since late last year, the banks had managed to reduce their
dependency on ECB funding. But in recent months, fresh jitters
about Greece's financial problems--and its impact on Greek
banks--prompted a fresh wave of deposit withdrawals, further
crimping the banks' liquidity.
This month, Greek banks recorded an acceleration in withdrawals
in May, when the apparent risk of a sovereign default and a new
banking crisis moved many savers to transfer their money
elsewhere.
Bank deposits held by Greek corporations and households fell
2.5% to EUR191.933 billion in May from EUR196.76 billion in April,
recent central bank data show.
-By Alkman Granitsas, Dow Jones Newswires; +30 210 331 2881;
alkman.granitsas@dowjones.com