ITV News: Emergency credit to Greek banks unchanged by ECB

“In this context, the Governing Council decided today to adjust the haircuts on collateral accepted by the Bank of Greece for ELA“.

But analysts believe the European Central Bank will not want to be the one to pull the plug on Greece and force the country out of the single currency. But in a highly contentious move, opted to tighten the collateral rules it imposes on lenders to access the lifeline, intensifying the squeeze on the cash-starved banks, which are set to remain closed for another two days.

“At this stage, the Greek Government would turn to its Central Bank to provide guarantees for the Greek banks and this would in effect be a step away from Grexit with all the economic uncertainty this would give rise to”, Von Brockdorff said.

Sakellaridis said the people’s message can not be ignored that viable deal must be fair to the poor and deal with Greece’s debt issue while pumping liquidity into the ailing banks. It forced the Swiss National Bank to intervene to hold down the franc’s value as the spectre of a Greek exit draws ever closer.

With cash dwindling in his nation’s ATMs, Greek Prime Minister Alexis Tsipras convened an emergency meeting of leaders from the country’s main political parties after Finance Minister Yanis Varoufakis announced his resignation. This consideration may prompt a further acceleration in the eurozone authorities’ continuing policy response to the eurozone sovereign debt crisis, as happened in 2012, if Greece does leave. For months, they have depended on the ECB’s emergency loans to compensate for withdrawals of money by Greeks who are anxious that their government would be unable to reach a bailout agreement with its creditors.

Capital controls were enacted on June 28, limiting ATM withdrawals by Greeks to €60 (NZ$100 approx) per account daily after a referendum on austerity sparked a run on deposits.

It’s better to keep the banks closed than to let them be emptied and prove that there is a banking crisis.

Investors in Europe’s biggest companies were braced for tumbling stock markets today (Monday) after Greeks appeared to have overwhelmingly rejected the bail-out terms of their creditors, throwing the country’s future in the eurozone into jeopardy.

The central bank’s emergency loans would not be a permanent solution.

A decision on how to solve Greece’s financial problems needs to come quickly as the country’s economy can’t just be frozen, he added.

In the case of Cyprus, there were howls of protest when a eurozone bank bailout for the first time required some depositors to take “haircuts”, or losses on their money.

A Cyprus-style rescue of the banks might not be in the cards. “And I’m nearly certain that there would have to be some haircutting”.