{"id":10402,"date":"2015-07-26T13:31:29","date_gmt":"2015-07-26T18:31:29","guid":{"rendered":"http:\/\/olduvai.ca\/?p=10402"},"modified":"2015-07-26T13:31:29","modified_gmt":"2015-07-26T18:31:29","slug":"greek-capital-controls-to-remain-for-months-as-germany-pushes-for-bail-in-of-large-greek-depositors","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=10402","title":{"rendered":"Greek Capital Controls To Remain For Months As Germany Pushes For Bail-In Of Large Greek Depositors"},"content":{"rendered":"

Greek Capital Controls To Remain For Months As Germany Pushes For Bail-In Of Large Greek Depositors<\/a><\/h3>\n

Two weeks ago we explained why Greek banks, which Greece no longer has any direct control over\u00a0having handed over the keys to their operations\u00a0<\/a>to the ECB as part of Bailout #3’s terms, are a “strong sell” at any price<\/a>: due to the collapse of the local economy as a result of the velocity of money plunging to zero thanks to capital controls which just had their 1 month anniversary, bank Non-Performing Loans, already at \u20ac100 billion (out of a total of \u20ac210 billion in loans), are rising at a pace as high as \u20ac1 billion per day (this was confirmed when\u00a0the IMF boosted Greece’s liquidity needs by \u20ac25 billion\u00a0<\/a>in just two weeks), are rising at a pace unseen at any time in modern history.<\/p>\n

Which means that any substantial attempt to bailout Greek banks would require a massive, new capital injection to restore confidence; however as\u00a0we reported<\/a>, a recapitalization of the Greek banks will hit at least shareholders and certain bondholders under a new set of European regulations\u2014the Bank Recovery and Resolution Directive\u2014enacted at the beginning of the year. And since Greek banks are woefully undercapitalized and there is already a danger of depositor bail-ins, all securities that are below the depositor claim in the cap structure will have to be impaired, as in wiped out.<\/p>\n

Now, Europe and the ECB are both well aware just how insolvent Greek banks are, and realize that a new recap would need as little as \u20ac25 billion and as much as \u20ac50 billion to be credible (an amount that would immediately wipe out all existing stakeholders), and would also result in a dramatic push back from local taxpayers. This explains why Europe is no rush to recapitalize Greece – doing so would reveal just how massive the funding hole is.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Greek Capital Controls To Remain For Months As Germany Pushes For Bail-In Of Large Greek Depositors Two weeks ago we explained why Greek banks, which Greece no longer has any direct control over\u00a0having handed over the keys to their operations\u00a0to the ECB as part of Bailout #3’s terms, are a “strong sell” at any price: […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[46,1622,7541,2086,110,3325,3108,359,1167,6435,6559,6048,670,683,4318],"class_list":["post-10402","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bail-in","tag-bail-out","tag-bank-recapitalisation","tag-bank-run","tag-capital-controls","tag-creditors","tag-fitch","tag-germany","tag-greece","tag-greek-banks","tag-non-performing-loans","tag-none","tag-recovery","tag-reuters","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10402","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10402"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10402\/revisions"}],"predecessor-version":[{"id":10403,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10402\/revisions\/10403"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10402"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10402"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10402"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}