Greek banks to receive up to 15 billion euros from ECB

The Governor of the Bank of Greece Yannis Stournaras and the chief of the European Central Bank Mario Draghi have come to an agreement to provide Greek banks with further funding, worth12 to 15 million euros.

According to a Reuters report, the ECB reduced the haircut it applies on bonds submitted by Greek banks as collateral to borrow funds in a move to boost access to liquidity.

Essentially, the deal to refinance the Greek banks means that the Eurosystem has indirectly upgraded Greek treasury bonds. That way the ECB demonstrates its support towards the domestic banking sector in a period of great stress and pressure on Greek bonds.

Despite reducing its borrowing by 2 billion euros in September (to 42.56 billion euros), Greek banks still rely on the European Central Bank’s funding for liquidity.