The Bank of Greece (BoG) requested that Greek banks receive an increased emergency liquidity assistance (ELA) of 400 million euros from the ECB. This is the second rise in the last 10 days after the BoG had requested a rise in the ELA limit by 300 million euros on March 13, bringing the aggregate limit to 46.6 million till April 5. The new development confirms the pressure the Greek banking system is under and the uncertainty caused due to the completion of the second review hanging in the balance, which has led to the huge outflow of deposits from Greeks. According to a recent Moody’s analysis, a rise in the ELA in order to offset the outflow of deposits would increase the cost of bank financing and lead to a fall in profitability.
Second in 10 days