ATHENS: Two of Greece's top four banks have asked for emergency cash injections from the ECB, anticipating a shortage of funds tied to uncertainty over snap elections, the Greek central bank said Friday.
Analysts have warned that a victory in the January 25 election by a leftist party that wants to reverse the anti-austerity policy imposed on Greece in exchange for its international bailout might spark a run on banks by nervous Greeks that could possibly lead to the country exiting the eurozone.
Eurobank and Alphabank confirmed requests for the temporary liquidity injections, known as Emergency Liquidity Assistance (ELA), which are to be examined next week when the European Central Bank holds its monetary policy meeting on Thursday.
"It is a precautionary request," a Eurobank source said. "We don't currently need the programme and we don't expect to use it."
An Alphabank representative also said the request was a precautionary move.
"December withdrawals and the movement of the Swiss franc led us to make this request," said the bank representative.
A source in the Greek central bank did not exclude that other two major banks, National Bank and Piraeus Bank, would also make an ELA request.
Last week the Greek central bank expressed confidence in the finances of the country's lenders which were recapitalised as part of the international bailout.
It disputed press speculation of capital flight due to political uncertainty.
Greek banks haven't needed the ECB's ELA since May last year as the country finally exited six years of recession that had reduced the size of the economy by a fifth.
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