Agreement On Emergency Liquidity Assistance 17 May 2017

Emergency liquidity assistance (ELA) is the form in which central bank loans can be granted to creditworthy credit institutions in exceptional circumstances, temporarily and with adequate collateral. Since it is an instrument for managing liquidity crises, it differs from monetary policy measures taken by central banks. In December, the ECB lowered the ceiling on emergency cash assistance (ELA) for Greek banks they receive from the national central bank by €900 million to €4.0 billion ($4.55 billion). ($1 = 0.8839 Euro) (Reports by Angeliki Koutantou and Lefteris Papadimas) The rules and procedures for making ELA available are set out in the ELA Agreement, which also defines the role of the Governing Council in the provision of ELA by the national central banks (NCBs), in particular in the assessment provided for in Article 14.4 of the Statute of the European System of Central Banks (ESCB) and of the ECB, whether the provision of ELA by the Eurosystem NCBs is relevant to the objectives and tasks of the ESCB. ATHENS, Jan 24 (Reuters) – Greece`s central bank said on Thursday it had stopped publishing data on emergency liquidity aid to Greek lenders after the facility fell below the threshold set by the European Central Bank in 2017. In his presentation, Professor Gortsos presented the legal basis of ELA in the euro area on the basis of his book in preparation European Central Banking Law – The Role of the European Central Bank and National Central Banks under European Law (Palgrave Macmillan). Under a traditional approach, often referred to as “constructive ambiguity”, the conditions under which central banks can exercise their power to act as lenders of last instance are not explicitly defined in laws or regulations. The same is true in the context of the euro area, where ELA is not provided for in the EU Treaties: the corresponding procedural arrangements are set out in the ECB`s 2017 Agreement on Emergency Liquidity Support, which sets out the specific technical specifications for the procedures for making ELA available. In his presentation, Professor Gortsos explained who provides the ELA under what conditions and when and how the provision of the ELA can affect the objectives and tasks of the Eurosystem. The objective of ELA is to provide money to the central bank to solvent financial institutions facing temporary liquidity problems outside the normal monetary policy operations of the Eurosystem. Vítor Constâncio then commented on the presentation which highlighted the application and penetration of the agreement on the basis of the experience gained so far during the euro crisis.

In the ensuing discussion, the two speakers highlighted lessons learned from previous episodes and possible avenues for the future, in particular for possible future revisions of the existing ELA mechanism. “In accordance with the agreement of 17 May 2017 on emergency cash assistance, the Bank of Greece will stop issuing the press release on the ELA ceiling for Greek banks, given that the ELA provision no longer exceeds the threshold of 2 billion euros,” the Bank of Greece said in a statement. The European Central Bank (ECB) today published the text of the Emergency Liquidity Assistance Agreement (ELA) following a decision of the Governing Council of 17 May 2017 to further increase the transparency of ELA. (In the third paragraph, specifies that the data were last published in December) Reproduction is authorized with acknowledgment of the source. This publication replaces the ELA procedures document, which has been available on the ECB`s website since October 2013. . . .

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