Greece debt crisis: ECB 'to end' bank emergency lending

The European Central Bank is expected to end emergency lending to Greece's banks on Sunday, the BBC understands.

Well-placed sources told BBC economics editor Robert Peston a decision to end the Emergency Liquidity Assistance (ELA) would be made by the ECB's governing council later on Sunday.
Greek banks depend on ELA.

Cutting the lifeline could push Greece out of the euro. Some analysts have tweeted that the ECB is likely to cap, but not end, the ELA.

And French Prime Minister Manuel Valls said the ECB "is independent but... I don't think it can cut off rations [for the Greeks]". He said "it's the Greek nation that is suffering".

Greece will probably have to "announce a bank holiday on Monday, pending the introduction of capital controls", our economics editor says.

The bailout for heavily indebted Greece expires on Tuesday and talks have broken down.
Greek banks would find themselves in serious straits as soon as Monday if the ECB went ahead and cut the lifeline, our economics editor says.

It is one of the most momentous decisions the ECB has ever faced, since the euro was launched on 1 January 1999. 

Capital controls are restrictions on how much customers can withdraw from banks. Until now, the Greek government has signalled that it does not want to impose such controls.

In recent weeks, Greeks have withdrawn billions of euros from banks, and long queues formed at cashpoints on Saturday, amid fears that banks would not open on Monday.

The ECB has been sending emergency funds on a daily basis to the Greek central bank, which then allocates it to the high-street banks.

(BBC)