ECB Reportedly to Stop Emergency Assistance to Greek Banks

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The European Central Bank (ECB) will stop providing Emergency Liquidity Assistance (ELA) to Greece, the BBC reports, citing unnamed sources.

The end of emergency lending to Greece’s banks might come as soon as Sunday – a move that could force them to close on Monday.

Dependent on the the Emergency Liquidity Assistance (ELA), Greek banks could face serious problems on Monday. The ELA is approved by the ECB but supplied by the Bank of Greece, to provide the cash to depositors who want their money back.

If Europe cuts off its emergency loans to Greece which are keeping the country’s banking system afloat, it is likely for Greek banks to introduce capital controls, restrictions on how much customers can withdraw from banks.

The ECB’s governing council is meeting today to decide the next steps for Greece’s financial lifeline following the decision by Greek Prime Minister Alexis Tsipras to hold a referendum on new bailout terms.

France’s prime minister Manuel Valls on Sunday warned the European Central Bank against cutting off Greece’s “lifeline”, according to an AFP report.

It is not known if Greek banks will open on Monday.