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Draghi Calls for Overhaul of Bank Emergency Liquidity Rules

  • ECB president responds to question on Latvia’s ABLV Bank
  • Says national competence on ELA is a remnant of the past
Mario Draghi

Mario Draghi

Photographer: Alex Kraus/Bloomberg

European Central Bank President Mario Draghi said rules governing emergency cash injections to troubled lenders ought to change, adding to signs that the abrupt failure of ABLV Bank last week may force regulators to contemplate overhauls in wider financial supervision.

Asked why the ECB didn’t bloc the injection of Emergency Liquidity Assistance, or ELA, to ABLV just hours before it was declared as failing or likely to fail, Draghi said that the Frankfurt-based central bank can only object to such injections when they interfere with monetary policy objectives.