ECB's Greek exposure now greater than its capital
Simon Ward
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The ECB was forced to step up its support for Greece during April as the run on the country's banking system gathered pace.
The Bank of Greece has yet to release full statistics on its website but its monthly financial statement shows lending to credit institutions of €84.8 billion at the end of April, up from €67.0 billion in March. The increase of €17.8 billion represents an acceleration from gains of €7.2 billion in March and €12.5 billion in February – see chart.
ECB / Bank of Greece lending of €84.8 billion is the equivalent of 17% of the assets of the Greek banking system at the end of March, the latest available month. It exceeds the ECB's capital and reserves of €77.3 billion, according to its latest weekly statement.
The ECB has acquired an additional exposure to Greece of €25 billion via purchases of government bonds under its securities markets programme, according to press reports.
National central bank statements show little change in ECB lending to banks in Ireland, Italy, Portugal and Spain during April, suggesting that a Greece-style run has yet to develop in these economies. The largest increase was in Portugal, where Banco de Portugal lending to domestic banks rose from €16.1 billion to €18.4 billion.
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