Greek banks can avail emergency liquidity as long as they remain solvent, European Central Bank President Mario Draghi said Friday.
However, Draghi pointed out that higher yields caused by the lingering uncertainty were eroding the value of the collateral banks offer in return for loans.
“The higher the yields, the more collateral gets destroyed,” Draghi said in a press conference in Riga, Latvia, where the Eurogroup met.
Early February, the ECB suspended the waiver extended to Greek public securities used as collateral by financial institutions for central bank loans. However, the bank later raised the support for Greek banks under the Emergency Liquidity Assistance scheme, which is costlier.
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