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Greek Central Bank Gets More Liquidity Assistance

John Seward

A bank run in Greece prompted European Central bank officials to boost emergency lending for the second time in two days, according to multiple reports Friday.

The ECB increased its liquidity assistance by about $2 billion on Friday following a request from the Bank of Greece.

About $1.25 billion was extended Wednesday by the ECB and total liquidity assistance is now roughly $97.58 billion.

It would take up to a month at current withdrawal rates for Greek banks to exhaust their collateral reserves, according to The Wall Street Journal.

Greek depositors as of Thursday had seen depositors withdrawing about $2.27 billion in the past three days, according to multiple reports.

Related Link: Greece Is Closer To 'The Abyss,' Warns Berenberg Chief Economist

The bank-run amounted to about 1.5 percent of all corporate and household deposits in Greek banks as of Thursday, according to Reuters.

But the emergency lending move was intended to stave off a weekend collapse of the Greek banking system, according to The Telegraph.

Without the funds, Greece would likely find itself in the midst of a bank run, forcing imposition of capital controls to stem the flight, the Telegraph said.

Such measures, which include deposit withdrawal limits, were last seen in the eurozone in 2013 in Cyprus.

An impasse appeared to continue Friday over efforts to keep Greece in the eurozone, with a current bailout program unrelated to the liquidity assistance set to expire June 30.

European heads of state are expected at a meeting Monday called by European Council President Donald Tusk.

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