ATHENS - The European Central Bank (ECB) raised the level of emergency funding for Greek banks by an unspecified amount yesterday following a request from the Bank of Greece, a Greek bank source said.
"There was no problem with the financing of Greek banks," the source said, adding that bank governors were expecting a "positive result" at an emergency euro zone leaders' summit on Greece on Monday.
According to state agency ANA, the funding cap was raised by €3.3 billion (S$5 billion).
The Bank of Greece had earlier insisted that the country's banking system was stable amid a rush of deposit withdrawals this week fuelled by the continued deadlock in Greece's loan talks with its European Union-International Monetary Fund creditors.
"The governor of the Bank of Greece has confirmed the stability of the banking system, which is fully safeguarded by the joint actions of the bank and the ECB," said Greece's central bank.
A billion euros were withdrawn from Greek banks on Thursday, following another €1.6 billion withdrawn over the two previous days, Euro2day website reported.
So far, there have been no signs of panic on the streets of Athens, or queues forming outside bank branches. But if deposit flight moves faster than the extra emergency liquidity assistance that the ECB grants Greek lenders, it could force Athens to impose capital controls.
"There are no lines or panic. It has been a quiet and gradual phase of withdrawals," said one of the bankers who disclosed the withdrawal figures. "They are due to worries on whether a deal will be clinched with the country's lenders."
A government spokesman has previously denied plans for imposing capital controls.