The ECB decided to keep the funds Ela Greek banks. Tomorrow … – Il Sole 24 Ore

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This article was published June 28, 2015 at 14:33.
The last change is the 28 June 2015 at 18:11.

FRANKFURT – Once again, the European Central Bank has chosen not to pull the plug on Greek banks , keeping the provision of emergency liquidity (Ela), even after the breakdown of talks between Greece and its international creditors and the announcement of the referendum by the Government of Athens. The board is ready to reconsider its decision, the ECB said in a statement. Another meeting is planned already in the morning on Monday.

The level of 89 billion Euros is the same as the last few days and the board of the ECB has maintained the same even though the conditions of access liquidity, which is provided by the Greek Central Bank, but must be authorized by the ECB. It is likely, however, that after the massive flight of deposits in recent days, which in fact have already used up all the liquidity provided Greece is still forced to close banks for a few days and introducing capital controls.

The Institute of Frankfurt has therefore once again wanted to avoid making a decision that would speed up the exit of Greece from the euro, on which the choice is up to politicians, according to the central bankers. However, it is unclear whether the current level of liquidity will be sufficient to keep open the doors of Greek banks tomorrow, after the race for withdrawals that occurred after the announcement of the referendum and that, according to some sources, would bring , on Saturday alone, with a decline in deposits of more than 700 million Euros and many ATMs never possess cash. We do not know if also the decision of the ECB will be accompanied by the introduction of limits on withdrawals and capital controls, which would reduce the impact on banks of the escape from stores.

After the meeting, via teleconference, the board of the ECB, the Governor of the Bank of Greece, Yannis Stournaras, said that his institution “as a member of the Eurosystem, will take all necessary measures to ensure financial stability for Greek citizens in these difficult circumstances.” In the afternoon we will meet in Athens on Financial Stability Board, which is part of the way, as well as Stournaras, Finance Minister Yanis Varoufakis.
A note of the ECB states that “the Governing Council is monitoring closely the situation on the financial markets and the potential implications for monetary policy and for the balance of risks to price stability in the euro. The board is determined to use all the tools available within its mandate “.

Draghi so for the moment kept open the tap of liquidity, despite a very strong opposition within the council, but it has effectively frozen the amount available to the levels of four days ago, and the situation is reconsidered almost by the hour. A turning point could be Tuesday when it expires definitively the agreement between Greece and its creditors, which had already been extended to the end of February and on which you have not found an agreement for a further extension. After this deadline, keep the Ela for the ECB will become even more problematic.

In Frankfurt there is concern about the possible contagion to other euro area countries, in particular those considered Southern Europe, such as Italy, Spain and Portugal. The ECB, however, could decide to accelerate purchases of securities in these countries, according to the program of Quantitative easing (Qe), should they be hit by a wave of sales. Moreover, the central bank had already announced plans to accelerate purchases before the summer break of the markets and therefore could proceed without having to take further decisions.

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