Greece Just Lost Control Of Its Banks, And Why Deposit Haircuts Are Imminent

Mario-Draghi-laughingYes, Greek banks might have been ruined – something that was transparent given a initial bailout of 2010 – though during slightest a Greek state had control over them: as such it could have mandated mergers, recapitalizations, liquidity injections, even depositor bail-ins (perhaps a harshest doctrine for a typical Greek race as a outcome of this latest predicament is that deposits are not “cash in a bank” though liabilities of ruined financial organizations).

Starting on Wednesday that will no longer be a case.

Because while Greek banks will say their collateral controls for months and withdrawals will be singular to €60 or reduction for months (the ECB is good wakeful that any boost to a ELA will outcome in a soon swell in deposition outflows until a new ELA roof is reached, and so on ad inf) a one pivotal change on Wednesday when a Tsipras government, whose bloc no longer has a infancy in council and will have to rest on antithesis votes, votes by a degrading Greek “pre-deal” to clear negotiations for a betrothed €86 billion in bailouts (which will be used roughly wholly to repay a Troika) is that it will

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