Extra liqudity for Greek banks

The European Central Bank (ECB) approved a two-week extension on emergency funding to Greek banks, a bank source said late on Wednesday, two days before Athens is meeting eurozone finance ministers to get new loans.

The ceiling for ECB emergency liquidity assistance (ELA) has been raised to 68.3 billion euros ($78 billion), less than a week after the Frankfurt-based bank had moved to increase the previous cap to 65 billion euros.

The move follows the ECB's announcement last month that it would no longer accept Greek sovereign debt as collateral for loans in its normal refinancing operations, effectively shutting off Greek banks from a key channel of financing.

However, the ECB did keep the ELA channel open, though this is more expensive for Greek banks as it is the Greek central bank that is on the hook for any potential losses.

The ECB council will re-examine its ELA assistance for Greek banks at its next meeting in two weeks' time.

pad/uhe (AFP, Reuters)