ECB Council member Jazbec: No acute insolvency risk for Greek banks

cep financial expert Van Roosebeke: Emergency liquidity assistance from the central bank can temporarily stabilise the situation of Greek banks. The ECB will not want to renew it permanently, though.

Greek lenders' fate rests on central bank

Greek banks are currently not at risk of insolvency given that the European Central Bank has authorized Greece's national central bank to provide the country's lenders with emergency liquidity assistance (ELA), ECB Governing Council member Bostjan Jazbec told German daily Handelsblatt in an interview. "The decisions on ELA are reviewed every two weeks. At the moment, the solvency of the Greek banks is not in danger," the Slovenian central bank governor said. The emergency liquidity assistance can temporarily stabilize the situation of Greek banks, cep financial expert Bert Van Roosebeke agrees. “It should, however, be granted only to banks which have no solvency problem and the ECB will not want to renew it permanently, “ he warns. “This will become a burning issue when the Eurogroup and Greece will not be able to agree on the adherence to the reform path soon.”