The Bank of Greece announced on Wednesday that the European Central Bank decided on Tuesday to further decrease the cap for Emergency Liquidity Assistance (ELA) to Greek banks from 88.9 billion euros to 87.9 billion euros.
“The 1 billion euro reduction in the ceiling reflects an improvement of the liquidity of Greek banks, amid a reduction of uncertainty and the stabilization of private sector deposit flows,” the Bank of Greece announced, after noting that it had asked the ECB for the reduction in the ceiling.
Among the new Greek government’s priorities is the recapitalization of Greek banks. Such a recapitalization is expected to happen following the completion of the impending first review of the third Greek bailout as well as after the conduction of a stress test on the Greek banking sector. Eurogroup President Jeroen Dijsselbloem said he expects Greek banks to be recapitalized sometime between November and December.
Although ELA ceilings for Greece have gradually decreased in the past month, capital controls,which were imposed on June 28th, are still in effect. National Bank Governor Louka Katseli noted earlier in the week that she expects them to be lifted during early 2016.
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