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5 Feb 2015
We Should Apply Strict Standards With ELA – ECB’s Weidmann
FXStreet (Mumbai) - The European Central Bank (ECB) Governing Council member and Germany's central bank President Jens Weidmann said in a German newspaper interview, that ECB should use strict standards in granting emergency liquidity assistance (ELA) to banks.
Key Quotes:
"ELA should only be awarded for the short term and to solvent banks,"
"I am of the view that we should apply strict standards with ELA. If that should have consequences for financial stability, then politicians must live up to their responsibilities,"
"Governments and parliaments must take decisions about whether and how to keep banks afloat, or wind them up. After all, this can concern taxpayers' money."
The European Central Bank suspended on Wednesday a waiver allowing Greek banks to use government debt as collateral for loans, which had been granted because of Greece's dire economic situation.
Key Quotes:
"ELA should only be awarded for the short term and to solvent banks,"
"I am of the view that we should apply strict standards with ELA. If that should have consequences for financial stability, then politicians must live up to their responsibilities,"
"Governments and parliaments must take decisions about whether and how to keep banks afloat, or wind them up. After all, this can concern taxpayers' money."
The European Central Bank suspended on Wednesday a waiver allowing Greek banks to use government debt as collateral for loans, which had been granted because of Greece's dire economic situation.