(Reuters) - The European Central Bank has authorized Greece's national central bank to provide the country's lenders with some 60 billion euros ($68.74 billion) in emergency liquidity assistance (ELA), people familiar with the matter have told Reuters.
The decision came as the ECB canceled its acceptance of Greek bonds in return for funding on Wednesday, shifting the burden onto Greece's central bank to finance its lenders.
That move means ELA provision is now critical to Greece's banks, and in turn to the country's fate. But any provision of such liquidity is tightly controlled by the ECB.
* Euro zone banks can receive central bank credit not just from the ECB's regular funding operations, but also exceptionally through ELA.
* Under ELA, a national central bank may provide funding to a solvent bank, or group of solvent banks, that is facing temporary liquidity problems.
* Responsibility for the provision of ELA lies not with the ECB but with the national central bank, meaning it shoulders the risks -- and any costs -- arising from the granting of such funding.
* The ECB's Governing Council retains responsibility for restricting ELA operations if it believes these may interfere with its 'objectives and tasks', which can be broadly described as delivering price and financial stability. Such decisions require a two-thirds majority on the Council.
* National central banks inform the ECB of the details of any ELA operation within two business days of it being carried out, at the latest. Such details include: the bank involved, the volume of the ELA, the collateral/guarantees against which it was granted, the maturity date, the specific reasons for the ELA provision, and the interest rate the bank will pay.
* In the event of the ELA operations for a bank, or group of banks, exceeding a threshold of 500 million euros, the national central bank concerned must inform the ECB as early as possible prior to giving the assistance.
* Should the provision of ELA to a bank, or group of banks, exceed 2 billion euros, the ECB Governing Council will consider whether there is a risk it may interfere with the ECB's objectives. Upon the request of the national central bank concerned, the Council may decide to set a threshold and not object to ELA operations below that level and conducted within a pre-specified short period of time.
For further details, click: https://www.ecb.europa.eu/pub/pdf/other/201402_elaprocedures.en.pdf?e716d1d560392b10142724f50c6bf66a
(Writing by Paul Carrel; Editing by Catherine Evans)