Speaking to ANA-MPA, bank officials said the two banks did not intend to make use of the capital available through ELA in the immediate future, as they continued having the necessary collateral for funding from the European Central Bank, but noted that the application was made purely for precautionary reasons because of the conditions prevailing currently. The Bank of Greece also confirmed the two banks' application for funding.
Officials from the two banks told ANA-MPA that their decision to resort to ELA was taken in order to deal with current liquidity needs because of a decline in deposits and the need to participate in Treasury bill auctions made by the Greek state, while developments in current markets in the aftermath of the Swiss central bank intervention was an additional factor. Credit from ELA was charged with an interest rate of 1.55 pct, up from 0.05 pct of the base lending rate of ECB.
The two banks' applications will be discussed by ECB next week. ELA is offered following approval by the European Central Bank with the responsibility of national central banks and it is offered only to viable banks on collateral.
ANA-MPA
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