The European Central Bank on Monday said it made no change to the level of emergency liquidity assistance available to Greek banks, but appeared to raise the haircuts on collateral the institutions must pledge in return for the emergency loans from the Bank of Greece. "The financial situation of the Hellenic Republic has an impact on Greek banks since the collateral they use in ELA relies to a significant extent on government-linked assets," the ECB said, in a statement on its website. "In this context, the Governing Council decided today to adjust the haircuts on collateral accepted by the Bank of Greece for ELA." Tighter haircuts would effectively mean banks have to pledge more collateral than before in return for funding. The ECB said the Governing Council "is closely monitoring the situation in financial markets and the potential implications for the monetary-policy stance and for the balance of risks to price stability in the euro area. The Governing Council is determined to use all the instruments available within its mandate."
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