Latest BoG data depict that Greek banks’ Eurosystem funding slightly eased in October with a c€23bn shift from ECB to ELA funding. In particular, ECB funding dropped by €23.7bn or 78.5% m-o-m to €6.5bn in October, while BoG liquidity provided to Greek banks through the ELA mechanism rose by €22.2bn or 22.0% m-o-m to €122.8bn.
Overall, Greek banks’ Eurosystem (ECB plus ELA) funding slightly eased by €1.6bn or 1.2% m-o-m to €129.3bn in October, following a drop of €0.8bn in September, most likely reflecting deposit inflows of €1.0bn and €1.2bn respectively. Note that Eurosystem funding had slipped by €5.3bn to €130.3bn in July (the first monthly drop since April), while June figure of €135.6bn was the second historic highest after the peak of €157.1bn recorded in February ‘12.
It is reminded that ECB funding had recorded a sharp drop in July (-€49.7bn) with a consequent increase in ELA liquidity (+€44.4bn), since GGBs were not accepted as collateral by ECB as of July 25. In particular, ECB had announced on July 20 that “due to the expiration on July 25 of the buy-back scheme for marketable debt instruments issued or fully guaranteed by the Hellenic Republic, these instruments will become for the time being ineligible for use as collateral in Eurosystem monetary policy operations”. The formal Eurogroup decision on the disbursement of the next tranche by December 13 is anticipated to lift the aforementioned restrictions of GGBs ECB ineligibility.