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ECB to suspend lending to Greek banks

Many banks based in Greece will not be able to access funds from the European Central Bank (ECB) for the foreseeable future, it has emerged.

The central institution announced last night (16 May) it has decided to suspend the credit line available to financiers in the debt-stricken Mediterranean country as fears over its economic future continue to intensify.

Greek citizens are continuing to withdraw euros from banks due to the possibility of the nation departing the eurozone in the coming weeks as progress in establishing a bailout package seems to have stalled.

And in a statement released yesterday evening, an official from the ECB confirmed no assistance will be provided to some Greek institutions because they are "severely undercapitalized" at the moment.

"Once the recapitalization process is finalized - and we expect this to be finalized soon - the banks will regain access to standard Eurosystem refinancing operations," they added.

By Tony Aynsley