Via Greek press (bolding mine):
- Two Greek systemic banks reportedly submitted the first requests to the Bank of Greece for cash via the emergency liquidity assistance (ELA) system on Thursday
- In response to the pressing liquidity conditions resulting from the growing outflow of deposits as well as the acquisition of treasury bills forced onto them by the state
- Banks usually resort to ELA when they face a cash crunch and do not have adequate collateral to draw liquidity from the European Central Bank
- Bank officials commented that lenders are resorting to ELA earlier than expected, which reflects the deteriorating liquidity conditions in the credit sector
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I posted earlier on the Greek central banks soothing words and said … If you were one of the traders that believed the soothing words from the Swiss National Bank on their ‘utmost’ determination to defend the cap, you may be forgiven for taking these comments with a grain of salt or two. Talk is cheap, no?
