Local
articles | 07 February 2014

Dependence of Cypriot banks on ELA drops

The dependence of Cypriot banks on the Emergency Liquidity Assistance (ELA) in December 2013 recorded a further decrease by €224 million, with the amount dropping to €9.55 billion in the last month of 2013, according to the Central Bank.

In November the dependence of Cypriot banks on the ELA amounted to €9.77 billion, whereas in October amounted to €9.85 billion. The significant drop in borrowing from ELA began in August, when the Bank of Cyprus exited the resolution state and became once again accepted as counterparty credit institution by the European Central Bank (ECB) for monetary policy, and thus could be funded by the Eurosystem.

The Bank of Cyprus has the ability to use Republic of Cyprus bonds, as well as bonds guaranteed by the Republic, in order to receive direct funding from the ECB through monetary policy transactions. The dependence of Cypriot banks on the ELA had reached its highest point in March, specifically €11.40 billion, and dropped to €9.85 billion in August, where it remained until October. The decrease in the dependency on the ELA was assisted by securing liquidity from the Eurosystem, which increased to €1.60 billion in December. In November, the amount reached €1.55 billion. Furthermore, according to the figures, the total value of gold in CBC assets reached €389.19 million in December 31, from €441.93 million in November. The general government debt to the Central Bank was at the end of December €1.35 billion.

Source: Financial Mirror

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