ECB demands more collateral from Greece 07 July 2015Frankfurt Reporter: Mark Dugdale
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The European Central Bank (ECB) has adjusted the haircuts on collateral that the Bank of Greece can accept for emergency liquidity assistance, turning the screw on the country’s already fragile banking system.
The country’s banks can access €89 billion in cash in return for Greek government bonds, but the ECB asked the Central Bank of Greece to require more collateral in return for emergency liquidity assistance.
The ECB, which also froze the emergency liquidity assistance ceiling at €89 billion, said in a statement on 6 July: “The ECB is closely monitoring the situation in financial markets and the potential implications for the monetary policy stance and for the balance of risks to price stability in the euro area.”
Capital controls are still in force in Greece following the 5 July referendum in which 61 percent of Greek voters refused to accept the EU’s new bailout package.
The Hellenic Capital Market Commission has also implemented another short selling ban, starting from today. It's due to end on 13 July.
The first ban, implemented at the same time as capital controls, was in effect between the end of June and 6 July.
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