Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

ECB to fund Greek banks as long as they stay solvent: Coeure

Published 04/22/2015, 06:24 AM
Updated 04/22/2015, 06:24 AM
© Reuters. Coeure, member of the Executive Board of the European Central Bank (ECB), gestures during the session 'The Global Economic Outlook' in the Swiss mountain resort of Davos

© Reuters. Coeure, member of the Executive Board of the European Central Bank (ECB), gestures during the session 'The Global Economic Outlook' in the Swiss mountain resort of Davos

ATHENS (Reuters) - The European Central Bank will continue to fund Greek banks as long as they stay solvent and have enough collateral, Executive Board Member Benoit Coeure told a newspaper on Wednesday, dismissing talk that Athens might ditch the euro.

Worries over the standoff between the leftist-led government in Athens and its creditors - the euro zone and the International Monetary Fund - over reforms needed to unlock bailout funds has sparked uncertainty and deposit flight from Greek banks.

They have been relying on emergency liquidity assistance (ELA) from the domestic central bank, drawn against collateral, as progress on talks remains painfully slow.

ECB staff have prepared a proposal to reduce the value of that collateral, a media report citing people with knowledge of the discussions said on Tuesday. The ECB declined to comment.

ELA funding drawn from the Bank of Greece hit 68.5 billion euros in March as Greek banks suffered deposit outflows of 24 billion euros from December through February.

"The current situation is clearly not sustainable and requires quick and decisive action by the Greek authorities to turn things around," Coeure told Greek daily Kathimerini.

Despite tangible progress in talks with the EU, the IMF and the ECB, he said significant differences remained and further work was needed.

Coeure said Greece leaving the euro was "out of the question".

Capital controls were also not a working assumption. "In any case, it would not be up to the ECB to take measures of that sort. Those fall within the competence of national authorities," he said.

"The euro area needs Greece just as Greece needs the euro. An overwhelming majority of the Greek population want to keep the euro. It is the responsibility of the Greek government to take the appropriate steps to ensure its policies are in line with these clear preferences," he told the paper.

© Reuters. Coeure, member of the Executive Board of the European Central Bank (ECB), gestures during the session 'The Global Economic Outlook' in the Swiss mountain resort of Davos

Asked about whether the ECB would return to Athens profits made on Greek bonds it bought at the height of the debt crisis, Coeure said that this hinged on Greece successfully concluding its bailout review.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.