{"id":9696,"date":"2015-07-04T07:50:03","date_gmt":"2015-07-04T12:50:03","guid":{"rendered":"http:\/\/olduvai.ca\/?p=9696"},"modified":"2015-07-04T07:50:03","modified_gmt":"2015-07-04T12:50:03","slug":"the-biggest-greek-banks-have-failed-and-resolving-them-wont-work-fitch","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=9696","title":{"rendered":"The Biggest Greek Banks \u201cHave Failed,\u201d and \u201cResolving\u201d Them Won\u2019t Work: Fitch"},"content":{"rendered":"

The Biggest Greek Banks \u201cHave Failed,\u201d and \u201cResolving\u201d Them Won\u2019t Work: Fitch<\/a><\/h3>\n

It\u2019s not like Fitch was ahead of the curve when it declared on Friday that the \u201cfour largest Greek banks have failed\u2026\u201d two days after downgrading them to \u201cRD\u201d (Restricted Default) because they\u2019d defaulted on their depositors.<\/p>\n

But Fitch shed a gloomy light on just how tough \u2013 or rather impossible \u2013\u00a0it will be to\u00a0move forward so that these banks can re-open their doors, even if negotiations\u00a0between Greece and its creditors can be brought back to life.<\/p>\n

The four banks \u2013 National Bank of Greece, Piraeus Bank, Alpha Bank, and Eurobank Ergasias \u2013 account for 91% of Greek banking assets. Already bailed out twice since the Financial Crisis, their shares were penny stocks while they were still trading on the Athens Stock Exchange, now also shut down.<\/p>\n

They have two toxic problems: they\u2019re illiquid\u00a0and<\/em>\u00a0insolvent. Either one would have been enough to topple them.<\/p>\n

They\u2019re illiquid because the Greeks have zero trust in them and have been desperately yanking their euros out while they still could.<\/p>\n

These banks would have toppled long ago if it hadn\u2019t been for the \u20ac40 billion the ECB injected into them\u00a0directly and for another \u20ac89 billion in Emergency Liquidity Assistance (ELA) through the Bank of Greece. The money was then passed on to the Greeks via cash withdrawals. But last weekend, the ECB shut off the spigot.<\/p>\n

And they\u2019re insolvent because the quality of their assets \u2013 mostly loans extended to Greek businesses and individuals \u2013 has collapsed at a blinding speed and has wiped out their capital. According to\u00a0Fitch<\/u><\/a>, by the end of March, 36% of the outstanding loans were 90 days or more past due. These \u201carrears may since have risen significantly.\u201d<\/p>\n

Stories have been\u00a0circulating<\/u><\/a>\u00a0how Greeks are \u201cstrategically defaulting\u201d on their debts. From their point of view, banks were black holes. Why pay them? They were proven right. But it hastened the collapse of the banks.<\/p>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

The Biggest Greek Banks \u201cHave Failed,\u201d and \u201cResolving\u201d Them Won\u2019t Work: Fitch It\u2019s not like Fitch was ahead of the curve when it declared on Friday that the \u201cfour largest Greek banks have failed\u2026\u201d two days after downgrading them to \u201cRD\u201d (Restricted Default) because they\u2019d defaulted on their depositors. But Fitch shed a gloomy light […]<\/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":[195,200,1167,6497,6498,6435,4254,4255],"class_list":["post-9696","post","type-post","status-publish","format-standard","hentry","category-economics","tag-debt","tag-default","tag-greece","tag-greece-default","tag-greece-insolvency","tag-greek-banks","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9696","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=9696"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9696\/revisions"}],"predecessor-version":[{"id":9697,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9696\/revisions\/9697"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9696"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9696"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9696"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}