Averting catastrophe is the ECB, which is leaning on the national central banks to provide "emergency liquidity assistance" (ELA), until the €35 billion-worth of support from the EFSF can be mobilised.
This does make me laugh.ELA is just another title for EFSF(or ECB funding),just in another guise.Where do they think the Greek Central bank gets part of €35 billion to loan to Greek banks?If they could lend their banks €35 billion just like that why are we(sorry the EZ) loaning them €13 billion in March?
The pretense is of course that the ECB is somehow sacrosanct from touching any Greek bonds
,this is just a sleight of hand to keep things ticking over till they cobble together some face saving deal.This money is just created out of thin air as an asset(and the loan as a liability...must keep the books balanced) by the ECB and transfered to the Greek central bank and so on.......,
This will last as long as needed till we get an "official loan" from the EFSF,which is in essense the same thing.
Even the FTs alphaville is confused by it saying "ELA’s not easy to spot!",but is really quite simple if one accepts this is merely printed money,...they even show the Greek central bank gaining €13.5 billion magically in one month from June to July last year, so this has been going on for some time already....it is very easy to do too,and has been used by the ECB in Ireland over Anglo Irish and by the BoE to cover the Northern Rock crisis.http://ftalphaville.ft.com/blog/2011/09 ... liquidity/