Banks partly wean themselves off ECB

Over the past year, the "big four" Greek banks - Alpha, Eurobank, National and Piraeus - have repaid €31.1 billion of the €50.9 billion they had drawn from the Eurosystem, that is, the European Central Bank and the central banks of the 20 eurozone countries, in the form of loans at favorable interest rates.

The liquidity was offered through the third iteration of the targeted longer-term refinancing operation (TLTRO III) that the ECB conducted from 2019 to 2022. The liquidity offer was designed to encourage the banks to provide more loans to businesses and consumers, other than mortgages.

With the rise in ECB's interest rates, the refinancing rate was 3.75%, making retaining that liquidity unsustainable. Greek banks offer much lower rates to private depositors (a weighted average of 1.42%) and businesses (2.28%). As a result, the "big four" started several rounds of...