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22ndannualcapital

Bank liquidity subject between Draghi and Stournaras

The President of the European Central Bank, Mario Draghi and the Governor of the Bank of Greece, Yiannis Stournaras are expected to discuss the possibility that Greek banks will need additional liquidity to cover their needs immediately before and after the snap election on the 25th of January, according to Kathimerini newspaper.

The two men will meet on the 7th of January at the next scheduled meeting of the ECB Governing Council.

With the leftist anti-bailout party SYRIZA poised to win the elections and potentially clash with Greece’s lenders over the future of the country’s financing, there have been concerns that a bank run might be triggered as nervous depositors pull funds from Greek banks.

According to the Kathimerini article, banking sources state that pre-election ‘hyperbole’ must be avoided in order for Greece – in the event that it is required – to access available alternative ‘liquidity reserves’ without encountering the opposition of northern European partners.

For the time being Athens and Frankfurt maintain that ‘there is nothing urgent’. However one banking source told Kathimerini that ‘everyone has their finger on the trigger’.

Much will be determined by the height of the deposits being removed Greek banks in the coming weeks.