{"id":11056,"date":"2015-08-15T07:45:26","date_gmt":"2015-08-15T12:45:26","guid":{"rendered":"http:\/\/olduvai.ca\/?p=11056"},"modified":"2015-08-15T07:45:26","modified_gmt":"2015-08-15T12:45:26","slug":"eu-aims-to-lure-greek-deposits-back-to-banks-with-bail-in-shield","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=11056","title":{"rendered":"EU Aims to Lure Greek Deposits Back to Banks With Bail-in Shield"},"content":{"rendered":"<h3 class=\"lede-headline\"><span class=\"lede-headline__highlighted\"><a href=\"http:\/\/www.bloomberg.com\/news\/articles\/2015-08-14\/eu-aims-to-lure-greek-deposits-back-to-banks-with-bail-in-shield\" target=\"_blank\">EU Aims to Lure Greek Deposits Back to Banks With Bail-in Shield<\/a><\/span><\/h3>\n<p>Euro-area finance ministers shielded Greek bank depositors from any losses resulting from the restructuring of the nation\u2019s financial system, as part of Friday\u2019s deal on an 86 billion-euro ($96 billion) bailout.<\/p>\n<p>Senior bank bondholders will be in the crosshairs if Greek lenders tap into any of the financial stability funds set aside in the new bailout. Euro-area finance ministers agreed to a deal that would next week place 10 billion euros in Greece\u2019s bank recapitalization fund, with another 15 billion euros available if needed.<\/p>\n<p>\u201cBail-in of depositors will be explicitly excluded\u201d from European Union rules to make private investors share the cost of fixing troubled banks, Eurogroup President and Dutch Finance Minister Jeroen Dijsselbloem told reporters after the six-hour meeting in Brussels.<\/p>\n<div data-view-uid=\"1|0_5_1_5\">By shielding all depositors, the euro area will protect small and medium-sized enterprises who have more than 100,000 euros in their accounts and aren\u2019t covered by government deposit insurance, Dijsselbloem said. This prevents \u201ca blow to the Greek economy\u201d that ministers wanted to avoid, he said. Instead, the focus will turn to bond investors.<\/div>\n<p>\u201cWhen so much money must be invested in banks, in the first place, banks must take part of the risks,\u201d Dijsselbloem said.<\/p>\n<p>Alpha Bank AE\u2019s 400 million euros of 3.375 percent notes due 2017 traded at 70.5 cents on the euro Friday to yield 25.4 percent. Those securities are up from a low this year of 27.5 cents in July.<\/p>\n<p>&nbsp;<\/p>\n<h2>Firewall Fund<\/h2>\n<p>At the start of the new aid program, the bank funds will be placed in a designated account at the European Stability Mechanism, the currency bloc\u2019s firewall fund. Bank supervisors can tap the money as required once Greece\u2019s banks have gone through stress tests and an asset-quality review.<\/p>\n<p>After Greece\u2019s lenders are recapitalized, the subsequent bank holdings will be transferred to the nation\u2019s planned privatization fund, which will then be able to sell off the stakes and use the proceeds to pay back bailout funds.<\/p>\n<p>&nbsp;<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>EU Aims to Lure Greek Deposits Back to Banks With Bail-in Shield Euro-area finance ministers shielded Greek bank depositors from any losses resulting from the restructuring of the nation\u2019s financial system, as part of Friday\u2019s deal on an 86 billion-euro ($96 billion) bailout. Senior bank bondholders will be in the crosshairs if Greek lenders tap [&hellip;]<\/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":[53,63,5752,233,6936,279,280,282,7336,284,285,1167],"class_list":["post-11056","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-deposits","tag-banks","tag-bloomberg-news","tag-ecb","tag-esm","tag-eu","tag-euro","tag-european-central-bank","tag-european-stability-mechanism","tag-european-union","tag-eurozone","tag-greece"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11056","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=11056"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11056\/revisions"}],"predecessor-version":[{"id":11057,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11056\/revisions\/11057"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11056"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11056"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11056"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}