Despite the imploring of Greek bankers for Greeks to “take your money out of your chests and houses – which are not safe in any case – and deposit at banks,” it appears the Greek bank deposit run continues. As The ECB just announced another €900 million increase in Emergency Liquidity Assistance, strongly suggesting that in the 2 days since the last increase, banks are once again insolvent facing a liquidity crunch as the “banks are trustworthy” propaganda falls on very deaf Greek ears.
In the latest example of what happens when circular funding schemes begin to trip over each other, National Bank of Greece has refused to participate in an auction for paper issued by the bailout fund which is set to recapitalize the Greek banking sector.
President of Greek Banks Association Louka Katseli appealed at the citizens to return their money to the banks. “Banks are absolutely trustworthy,” Katseli told Mega TV “as guaranteed by the ECB and the Bank Association, but they would have been even more powerful if 40 billion euros had not been withdrawn in the last months.
Katseli, a former PASOK Minister, appealed to citizens to return their deposits to the banks “now that the banks are open” after a three-week holiday and capital controls.
“Let’s all help our economy,” Katseli urged Greeks and added “If you take your money out of your chests and houses – which are not safe in any case – and deposit at banks, this will enhance liquidity.”
“There will be no need to “haircut” deposits in the future if we all act responsibly,” she added -cheerfully I suppose.
Katseli’s appeal triggered laughter among Greeks and one stressed with hint to capital controls “Oh yes! I will bring my money back to the bank and get it back 60 by 60 euro.”
Another one noted “Ah sure! Banks will never see my money again, I prefer to buy tonnes of peanuts with it.”
You really have to be paying attention to see what’s truly going on these days. The keepers of the system, that is the banking elites, now openly control everything — though you’d never know that by listening to the media.
Eurozone backs €7bn bridging loan
Jul 16, 2105
Eurozone ministers have agreed to give Greece a €7bn (£5bn) bridging loan from an EU-wide fund to keep its finances afloat until a bailout is approved.
The loan is expected to be confirmed on Friday by all EU member states.
In another development, the European Central Bank (ECB) agreed to increase emergency funding to Greece for the first time since it was frozen in June.
The decisions were made after Greek MPs passed tough reforms as part of a eurozone bailout deal.
How generous of the finance ministers of all those EU member states to agree to a “bridge loan” that will help Greece “keep its finances afloat”. This should provide the people of Greece with a bit of breathing room, right? Maybe access to their bank accounts (finally!), perhaps?
No, not at all. Here’s what the entirety of the “”loan”” will go towards instead:
The bridging loan means Greece will be able to repay debts to the ECB and IMF on Monday.
The timing could not be worse from a visual perspective but within minutes of theEurogroup confirming that they approved the €7.16 billion bridge loan (which will merely be recycled back to The ECB to ensure the appearance of normalcy continues), local reports note that the Greek finance ministry says banks will not re-open on Monday (as promised).
Three top Democrats are accusing the Department of Housing and Urban Development of quietly removing a key clause in its requirements for taxpayer-guaranteed mortgage insurance in order to spare two banks recently convicted of federal crimes from being frozen out of the lucrative market.HUD’s action is the latest in a series of steps by federal agencies to eliminate real-world consequences for serial financial felons, even as the Obama administration has touted its efforts to hold banks accountable.
“Mr. Jain created an environment by the physical and functional restructuring of the business GFFX division in the year 2005, involving also a change in the seating order of the trading floor in London which he initiated in which conflicts of interest between traders and submitters arose or were strengthened. There is suspicion that Mr. Jain might have knowingly made incorrect statements in his IBOR related Interview with the Deutsche Bundesbank.”
Yes, Greek banks may have been insolvent – something that was clear since the first bailout of 2010 – but at least the Greek state had control over them: as such it could have mandated mergers, recapitalizations, liquidity injections, even depositor bail-ins (perhaps the harshest lesson for the ordinary Greek population as a result of this latest crisis is that deposits are not “cash in the bank” but liabilities of insolvent financial organizations).
It’s Goldman Sachs’ world, we just happen to live in it.
That rather unfortunate, yet exceedingly accurate, characterization of the global financial and geopolitical landscape seemingly becomes more true with the passage of time and perhaps nowhere is it more evident than Europe, where the common currency experiment (which never had any hope of working without some semblance of a fiscal union) is on the brink of collapse.
As we noted in “The Biggest Winner From The Greek Tragedy,” the losers from the disintegration of the EMU are ordinary, common, taxpaying Europeans who enjoyed a few brief years of artificial prosperity, which in retrospect was entirely due to debt, masked well by the “currency swaps” and other financial engineering concocted by banks such as Goldman Sachs, in clear violation of the Maastricht treaty which is now a long-forgotten memory of the founding ideals behind the Eurozone. Continue reading »
In case you’ve been distracted by such things as the Greek debt crisis and a bizarre glitch that shut down the New York Stock Exchange for more than three hours Wednesday, the Chinese stock market has been in a free fall lately.
As cash withdrawals from Greek banks reach €100 million a day the country’s banking system will end up bankrupt on Monday if no deal with creditors is reached over the weekend, some senior bank executives told the Financial Times (FT) on Friday.
Cash withdrawals are at a high rate despite capital controls imposed by the Greek government. If the European Central Bank (ECB) doesn’t agree to extend its emergency liquidity assistance (ELA) program, customers will be left without money by Monday, according to one of the bankers who talked to FT. Continue reading »
The European Central Bank’s decision to reject the Bank of Greece’s request for increases in Emergency Liquidity Assistance (ELA) has, in a nutshell, crushed Greek banks for what appears to be purely political, nogitating-based motives. Greek financial advisor Alcimos (infamous for their heretical comments on the referendum) commenced proceedings before the General Court of the Court of Justice of the European Union, requesting the annulment of the ECB decisions.
The global and European economies are increasingly dominated by bureaucrats taking arbitrary decisions on capital allocation, with little regard for rules or process. The decisions of the ECB to reject the applications of the Bank of Greece for additional funding under ELA could have only been politically motivated, and therefore in clear violation of the ECB’s independence as enshrined in Article 123 TFEU. It is time for EU bureaucrats to stop acting as autocrats. Continue reading »
Long after Greece has left the Eurozone and Germany is using the Deutsche Mark as its currency, the people of the two nations, antagonized to a level unseen since World War II, will be accusing each other of benefiting more from the brief but tumultuous period of the common currency.
In reality, nobody had put a gun to Greece’s head and told it to lever up, enriching local oligarchs and corrupt politicians, taking advantage of credit that was artificially cheap only due to the common currency and an implicit monetary, if not fiscal, union. Continue reading »
HSBC just can’t seem to help itself. As The Sun reports, as part of a “team-building” exercise, six bankers filmed the fake ISIS-style beheading of an Asian colleague – while yelling ‘Allahu Akbar’. However, given that these were not C-level executives, there has been some consequences – the six bankers have been fired with HSBC noting “this is an abhorrent video and HSBC would like to apologize for any offense.”
Over the weekend, we showed why contrary to unfounded speculation that Greece is entirely contained, there are still extensive linkages when it comes to the fallout a Grexit would reap if not directly on private commercial banks which over the years managed to offload their Greek exposure to the Europe’s taxpayers….
… but on the sovereign economies of the Eurozone as well as the ECB, at first via the EFSF, then also via the SMP, the MRO, Target 2 and so on.
Overnight, Barclays took this analysis and also showed the absolute national euro exposure to Greece broken down by bailout program and also as a % of respective host nation’s GDP. What it found is the following: Continue reading »
Earlier today we reported that as Bloomberg correctly leaked, the ECB would keep its ELA frozen for Greek banks at its ?89 billion ceiling level last increased two weeks ago. However we did not know what the ECB would do with Greek ELA haircuts, assuming that the ECB would not dare risk contagion and the collapse of the Greek banking system by triggering a waterfall solvency rush in Greek banks if and when it boosts ELA haircuts. Turns out we were wrong, and as the ECB just announced “the Governing Council decided today to adjust the haircuts on collateral accepted by the Bank of Greece for ELA.”
The former Greek Finance Minister resigned because the Troika is not confortable with him in the room.
The Greek Finance Minister, Yanis Varoufakis, announced Monday his resignation because he believes that this can help the government to reach an agreement with the European institutions, hours after the victory of the ‘no’ in the referendum.
Varoufakis, who said he would resign if the YES won on Sunday’s referendum met on several occasions with Greek creditors as he represented the toughest wing of his government. He even accused the Troika of using “terrorism” against the Greek people. Continue reading »