ECB Doubles Greek Bank Aid

With deposits flying out of Greek banks over fears the country could be forced out of the Eurozone, the European Central Bank is pumping more emergency liquidity into the institutions to keep them solvent.

The ECB’s Governing Council raised the cap on Emergency Liquidity Assistance by about 1.5 billion euros ($1.6 billion) to 75.5 billion euros on April 22, Bloomberg said.

ELA is funding provided by national central banks at their own risk, and is extended against lower-quality collateral than the ECB accepts.

“The ceiling increase shows that deposit outflows from Greek lenders continue,” said Andreas Koutras, an analyst at in Touch Capital Markets Ltd. in London. “The question now is when will the collateral against ELA be exhausted – in other words how much time is left?”

The Eurozone will meet on April 24 in Riga, Latvia to discuss the stalled reform talks with Greece that is holding up release of a 7.2-billion euro installment, making depositors even more jittery.

“In recent days, there has been tangible progress in the quality of the discussions,” ECB Executive Board member Benoit Coeure said in an interview with the Athens-based Kathimerini newspaper. “Significant differences on substance remain.”