Late on Monday night, the ECB decided to maintain its liquidity freeze on the banking system. But in a highly contentious move, opted to tighten the collateral rules it imposes on lenders to access the lifeline, intensifying the squeeze on the cash-starved banks, which are set to remain closed for another two days.
The ECB said the move was based on the deteriorating quality of the bank collateral, most of which is made up of Greek government bonds. “In this context, the Governing Council decided today to adjust the haircuts on collateral accepted by the Bank of Greece for ELA,” it said.
So there’s no way the banks can reopen….
Puts a fair amount of pressure on, eh?