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Report: ECB to revoke Greek banks' access to cheapest funding program

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Report: ECB to revoke Greek banks' access to cheapest funding program

Greek banks will lose an ECB waiver that allowed them to access cheap central bank funding once the country exits its bailout program Aug. 21, Reuters reported Aug. 10.

Banks receiving the ECB's most inexpensive funding must back their borrowing with investment-grade sovereign debt, and Greece's debt fails to meet that criteria, Reuters noted. Banks in countries under a bailout program can receive a waiver, but that will cease once Greece's bailout ends, the ECB confirmed.

Greek banks have tapped about €8 billion from the ECB's longer-term refinancing operations that will have to be recollateralized, but a source told the newswire that the move is not expected to lead to an increase in the €8.4 billion cap on so-called emergency liquidity assistance. ELA is considerably more expensive for banks, and Greek lenders at one stage had drawn nearly €90 billion worth.