Citi, Goldman, ICAP And Others Preparing For Grexit, Again
Every couple of years the same identical European drill repeats itself: 1) Greece makes loud noises as it approaches an election, 2) Europe says it couldn’t care what the outcome is and that Greece should stay in the Euro but if it exits it won’t be a disaster, 3) the ECB reminds everyone of the lie that it is not preparing for Plan B (it is) despite holding on to over €100 billion in “credibility-crushing” Greek bonds, 4) panicking Greek banks say the deposit outflow situation is completely under control (adding that “The Bank of Greece along with the European Central Bank are monitoring closely the developments and intervene whenever this is necessary,” which is code word for far more familiar, five-letter word), and meanwhile 5) all non-Greek banks quietly start preparing for the worst case scenario.
So far this time around, we had everything but step “5”. We do now.
According to the WSJ, “banks and other financial institutions in Europe are stress-testing their internal systems and dusting off two-year-old contingency plans for the possibility Greece could leave the region’s monetary union after a key election later this month. Among the firms running through drills are Citigroup Inc., Goldman Sachs Group Inc. and brokerage ICAP PLC, according to people familiar with the matter.”
And soon enough Bloomberg, because who can possibly forget the mysterious appearance of the “XGD Crncy” in June of 2012, only to disappear moments later after a few hurried phone calls from Frankfurt…
…click on the above link to read the rest of the article…
