ECB increases ELA limit for Greek banks

Yesterday EUR-USD traded just above 1.09, this morning the pair is trading only just below that level. Therefore, based on the currency movement one might think nothing much has happened. And that is probably correct for EUR-USD if one considers the short term, says Commerzbank. 

Long term on the other hand yesterday's ECB press conference was quite a revelation for the euro. Initially ECB President Marion Draghi mentioned almost in passing that the ECB had increased the ELA volume for Greek banks. The amount increased to EUR 900m indicates still pressure is on Greece to drive the negotiations on, states Commerzbank.

However Draghi explained repeatedly that the Greek banks of course were solvent, otherwise the ECB would not be allowed to provide any ELA funds either. The only problem is that the securities the banks have submitted and as a result the majority of their assets consist of receivables from the Greek state. And according to Draghi the latter is insolvent. The ECB clearly applies whatever criteria deliver the outcome it is looking for at the time.