by Maria Spiliopoulou
ATHENS, Oct. 10 (Xinhua) -- Greek banking system is sound, central Bank of Greece Governor Yannis Stournaras assured on Wednesday, commenting on the recent pressure on bank stocks in the Athens Stock Exchange.
"The ongoing improvement of the liquidity situation of Greek banks reflects the improved condition of the Greek financial system," Stournaras said in an e-mailed press statement, after the new reduction of the Emergency Liquidity Assistance (ELA)- ceiling borrowing by Greek lenders.
"The recent stock market developments in respect of the banking sector are not related to the soundness of Greek banks and are due to purely exogenous factors, such as rises in interest rates internationally and in Greece's neighboring countries in particular," he added.
The press release was issued after the Governing Council of the European Central Bank (ECB) approved on Tuesday an ELA-ceiling for Greek banks of 5 billion euros (5.75 billion U.S. dollars) until Nov. 7, 2018, following a request by the Bank of Greece.
"The reduction of 0.2 billion euros in the ceiling reflects an improvement of the liquidity situation of Greek banks, taking into account flows stemming from private sector deposits and from the banks' access to wholesale financial markets," the Greek central banker's press release stressed.
In the past two weeks the banks index in the Athens stock market dropped to a 32-month low rekindling concern whether the country's four big banks can deal with the burden of the non-performing loans in the post-bailout era.
Greece exited this August the bailout programs which helped the country over the past eight years deal with the debt crisis. In the context of the international financial aid programs, the Greek banks were recapitalized three times.
The ailing economy has returned to growth, however challenges remain, as the government has said. (1 euro= 1.15 U.S. dollars)