The European Central Bank in Frankfurt said Thursday it is temporarily cutting off liquidity to Greek banks that are inadequately capitalized, pushing the onus of lending on the Greek central bank.

The ECB's announcement means Greek banks will need to move to Emergency Liquidity Assistance from the country's central bank in order to stay afloat.

Eighteen billion euros ($23 billion) will be made available next week for the country's top four banks -- National Bank of Greece SA (NYSE: NBG), EFG Eurobank Ergasias SA (Athens: EUROB), Alpha Bank AS (Athens: ALPHA) and Piraeus Bank SA (Athens: TPEIR). These four entities control 80 percent of the country's bank assets, according to Dow Jones.

The ECB is now shielding itself much more than was previously the case. They won't destroy their balance sheet for a single country -- their actions underpin that, Commerzbank rate strategist David Schnautz told Reuters.

Last month, ECB President Mario Draghi had warned that some Greek banks would not pass muster for further assistance.

We will be distinguishing which Greek banks are viable so as to be maintained as counterparties for the monetary policy operations and which are not going to be viable as counterparties for monetary policy operations, Draghi told a news conference.

Meanwhile, media outlets in Spain reported customers have withdrawn $1.27 billion out of recently nationalized Bankia SA (Madrid: BKIA) sent the bank's shares spiraling downward and officials scrambling to deny that there is a run occuring on Spanish banks. Bankia has lost 30 percent of its share value in the past 10 trading sessions.

The bank, which was formed in December 2010 from the merger of seven Spanish banks, was nationalized on May 9. The bank was the country's third largest lender in 2012.  Bankia shares plummeted over 13 percent in trading on Thursday.

The bank's CEO Jose Ignacio Goirigolzarri and Spanish Deputy Finance Minister Fernando Jimenez Latorre sought Thursday to quell growing concerns that Bankia and other Spanish banks could suffer the same depositors' run as Greece. Meanwhile, ratings agency Moody's Investors Services is poised to downgrade up to 21 Spanish banks as borrowing costs have sharply increased, according to Bloomberg.