ECB decided yesterday to raise the ELA funding threshold for Greek banks to Eur68.8 bn from Eur68.3 bn previously.

ECB chairman Mr Draghi indicated that Greek banks’ euro-system funding currently stands at Eur100 bn (we estimate cEur40 bn direct ECB funding and Eur60 bn through ELA). Mr Draghi also reiterated that ECB would review the eligibility of Greek govt bonds as collaterals for direct ECB funding after concrete indications of a positive assessment on the execution of the Greek programme. 

He also suggested that ECB rules would not allow direct funding of govts (possibly meaning through the issue of T-bills that could be purchased by Greek banks through ECB funding). He also stated that Greek banks are solvent, while there is still HFSF’s cEur10.0 bn buffer available to cover any recapitalization and resolution needs. ECB’s statements on Greece were broadly in line with expectations.