European Central Bank cuts off funds to Greek Banks
by Phantom Ace ( 3 Comments › )
Filed under Economy, Europe, Greece, Headlines at May 16th, 2012 - 2:50 pm
The Eurozone is starting to crack. The European Central Bank has stopped providing liquidity to Greek Banks.This occurred after there was a run on some Greek banks due to instability in that nation.
The news sent the euro lower against the dollar, fanning concerns among investors and in Greece that the country may have to leave the euro zone.
The development highlights the weak state of the banking sector in Greece, where Greeks are pulling euros out of the banks in fear that their country may exit the European single currency despite the declared determination of EU powers Germany and France to keep Athens in the monetary union.
“As recapitalization wasn’t in place, the ECB stopped monetary policy operations,” a euro zone central bank source told Reuters, declining to be identified. “They are now in the ELA of the Greek central bank.”
Stay turned, this is going to get ugly!
Tags: European Central Bank, Greek Crisis
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