ECB approves €60bn in emergency funds for Greek banks

The European Central Bank has given the green light to make up to 60 billion euros ($68.5 billion) in emergency liquidity available to Greek banks, a source close to a national central bank told AFP on Thursday.
The source confirmed a corresponding report in the daily Die Welt.
The day before, the ECB had effectively shut off Greek banks from one key channel of financing by saying it would no longer accept Greek sovereign bonds as collateral for loans in its normal refinancing operations.
Greek debt has a junk credit rating and, under ECB rules, should not qualify as collateral for loans, anyway.
But Athens had been granted a special waiver to that that rule as long as it was deemed to be in compliance with the terms of its 240-billion-euro EU-IMF bailout.
In a shock decision on Wednesday, the ECB announced it would now lift that waiver.
The move was seen as a severe blow to Greece and sent the Greek stock market into a tailspin and Greek borrowing costs soaring.
Nevertheless, analysts insisted that the ECB's would not push Greek banks into a liquidity crisis, since they had reduced their exposure to Greek government bonds and had other investment-grade assets which they could use as collateral instead.
According to some estimates, Greek banks were using 8.0 billion euros at most in Greek government debt as collateral for loans from the ECB in December, compared with total outstanding loan volume of 56 billion euros.
Under eurozone rules, banks can also call on the emergency liquidity assistance (ELA) facility for funding.
According to Die Welt, Greek banks had only requested "mid-single digit billions" of euros (or around five billion euros) in ELA funding so far.
The disadvantage with ELA loans is that they are more expensive than the central bank's regular refinancing operations.