ECB says it will continue to support Greek banks

LONDON (MarketWatch)
The European Central Bank will continue to support Greek banks, a spokesman said Wednesday in response to reports that the bank was considering a freeze in funding for the country's fragile banks
The ECB's governing council is holding a routine meeting Wednesday, overshadowed by reports of a sharp increase in deposit withdrawals in Greece, driven by fears that the country may have to leave the euro zone
With their capital largely destroyed by the Greek sovereign debt exchange earlier this year, and having lost access to market funding long ago, the banks are in no position to cope with large-scale deposit withdrawals
Greece's banks are dependent on loans from the central bank to refinance some 20% of their assets, according to Bank of Greece data
The ECB has repeatedly said that it can lend only to "solvent counterparties against adequate collateral."
The spokesman declined to say at what point the ECB would have to change its policy, if the reported deposit outflows continue
European creditors have in principle already agreed to fund a EUR25 billion capital increase for the Greek banking system, but the money has not yet reached them