Latest BoG data show that Greek banks’ ECB funding slightly eased by €0.9bn m-o-m to €5.6bn in November from €6.5bn in October. At the same time, BoG liquidity provided to Greek banks through the ELA mechanism marginally rose by €0.5bn m-o-m to €123.3bn in November from €122.8bn in October. It is reminded that there had been a major shift from ECB to ELA funding in October, with ELA funding increasing by €22.2bn m-o-m and ECB funding dropping by €23.7bn m-o-m.

Overall, Greek banks’ Eurosystem (ECB plus ELA) funding remained almost stable (down by €0.4bn) m-o-m at €128.9bn in November from €129.3bn in October. 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 also highlighted that Eurosystem funding follows a slightly declining trend over the past four months, recording a cumulative decrease of €2.8bn by November, most likely attributed to a similar amount of deposit inflows.

It is reminded that ECB funding had recorded a sharp drop m-o-m 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 Eurogroup formal decision on the disbursement of the next tranche on December 13 along with a further capital advance to Greek banks may lift the aforementioned ECB eligibility restrictions.