BBC – Is It Game Over For Greece? Bank Run Now Up To $1 Billion A Day
The amount of money being pulled out of Greece banks nearly doubles within a 24 hour period is now up to $1 billion dollars a day.
It just may be game over for Greece and those words are coming from the BBC.
Why? Every single bank account in Greece is facing “capital controls” in the form of frozen accounts and ATM withdrawn limits.
The simple reason is money is just disappearing from the banks at astronomical rates.
Yesterday, we did an update of the Greek bank jog, when noting that between €100-€500 million per day was being withdrawn from Greek banks based on Kathimerini reports. 24 hours later the jog has become a trot with the most recent estimate from Reuters now estimated at nearly double: “Combined daily deposit outflows from the major Greek banks have reached 500-800 million euros over the past few days, with the pace picking up as the election draws closer and rising noticeably on Tuesday, two bankers said.” This is roughly $1 billion a day in the upper case, and a number that is approaching 0.5% of the entire documented €170 billion (now likely much less) deposit base.
Greek banks see outflows pickup as election nears – bankers
ATHENS (Reuters) – Greek banks have seen a marked increase in the pace of bank withdrawals as a June 17 general election nears and fears grow that Greece could be forced out of the euro, senior bankers said on Wednesday.
Combined daily deposit outflows from the major Greek banks have reached 500-800 million euros over the past few days, with the pace picking up as the election draws closer and rising noticeably on Tuesday, two bankers said.
Deposit outflows at smaller and medium sized banks were running at 10-30 million euros.
“This includes cash withdrawals, wire transfers and investments into money market funds, German Bunds, U.S. Treasuries and EIB bonds,” said one banker, who spoke on condition of anonymity.
Fears that Greece may have to quit the single currency and return to a weak drachma have fuelled a steady stream of withdrawals by companies and businesses alarmed at the prospect of seeing the value of their deposits cut sharply.
The result of the election, called after a previous vote in May failed to produce a government, remains too close to call, with the conservative New Democracy party running neck and neck with radical leftist SYRIZA.
Both groups say they want Greece to remain in the single currency but SYRIZA has pledged to scrap a 130 billion euro bailout agreement signed in March which has imposed some of the toughest austerity measures seen in Europe in decades.
[...]
Source: Reuters
At the daily rate of doubling the “estimate” by Friday the trot will be an all out sprinting and Greece will be experiencing a $4 billion in outflows. We wonder which banks will have any cash left at that point.
How much of this is fact, and how much pre-election rumor-mongering to scare people from voting against Syriza remains to be seen. Due to the polling moratorium it is impossible to get any grasp of which is the most popular party in Greece currently, even if the polls that had been released had the accuracy of an Excel random number generator.
Source:Zero Hedge
Here’s the BBC asking if it is game over.
Is it game over for Greece?
The threat of “capital controls” now hovers over every Greek bank accountAll eyes are on Sunday’s election results in Greece.
It has been cast as a referendum on the country’s future membership of the eurozone.
But could it be that the result no longer matters?
The steady withdrawal of cash by depositors from the Greek banks has reportedly accelerated in recent days.
And if this apparent bank run gets out of hand, there is a danger that Greece could find itself forced out the euro, whichever way its citizens vote.
Out of cash
Nobody knows who will win the elections – there has been an official polling blackout since 2 June – although, whatever the outcome, it will most probably be followed by many days of coalition negotiations.
The big question is whether the radical left-wing upstarts of Syriza will pip the established center-right New Democracy to first place.
That would give Syriza a bonus 50 seats, making it by far the biggest party in the 300-seat parliament, though probably without a majority.
Syriza has vowed to reject the austerity program agreed with Greece’s rescue lenders in the eurozone and at the IMF.
But her eurozone partners have made clear in that case, they would not make any more bailout money available.
The government would then literally run out of cash within a couple of months.
And if the government does not have enough money to repay its debts, then the Greek banks – who are among the governments’ biggest lenders – would be bust.
In which case, the European Central Bank would have no choice but to cut off its lending to the banks.
And that would mean the banks also run out of euros, in effect forcing Greece out of the eurozone.
[...]
Source: BBC
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