ECB eases stance on Greek banks' funding

20 December 2012

Greek banks are once again set to be able to access cheap financing from the European Central Bank (ECB), it has emerged.

According to Reuters, the central institution has decided to lift a ban that has been in place since July, meaning the debt-addled Mediterranean nation can use its sovereign debt as collateral in ECB funding operations.

The body has opted to take this measure after recognising that Greece has made significant progress in reducing its public spending and implementing a range of budget reforms.

This move has increased confidence in European markets and Alan McQuaid, chief economist at Merrion Stockbrokers in Dublin, told the news source it represents a further step "suggesting that the chance of Greece leaving the eurozone has diminished".

Mr McQuaid went on to say it appears that an increasing number of officials are now supporting ECB president Mario Draghi's commitment to "do whatever it takes" to save the single currency area from collapsing.

By Asim Shah

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