YEREVAN, April 21. / ARKA /. The European Central Bank (ECB) is studying measures to restrict emergency funding for Greek banks under its emergency liquidity assistance, known as the ELA, Bloomberg reported Tuesday.
The central bank could make it more difficult for Greek banks to access liquidity from the ECB if the country’s leaders can’t reach an agreement with its creditors on economic reform measures. It would do this by increasing the discount on the bonds that Greek lenders posts as collateral when borrowing from Greece’s central bank.
The “latest rumblings out of Frankfurt reflect the growing frustration with the slow pace of negotiation and the sense of acceptance that the Greek situation may not be reparable,” said Boris Schlossberg, managing director of FX strategy at BK Asset Management, in a note.
Greece needs to reach an agreement on economic overhauls to receive its next tranche of bailout funds and avoid running out of cash needed to service debt.
Schlossberg said the euro managed to come off session lows as traders await Friday’s Eurogroup meeting of eurozone finance ministers, who will discuss the Greek bailout. A number of analysts have cautioned there may not be a major breakthrough in talks.-0-
