Run on Greek Banks Accelerates; ECB Halts Emergency Funding Hike; Untangling the Lies

Courtesy of Mish.

The curious story of the day is back-to-back reports, minutes apart, by the same news agency, saying different things.

I commented on that just a bit ago in Greece Says Creditor Agreement Deal Close, Senior Eurozone Official Says “I Wish it Were True”.

There is no proof Greece is the one lying, but Greece certainly benefits more from such a lie, two different ways.

1. Lies buy Greece more time to prepare capital controls
2. Lies may stop some panic out of Greek banks

Assuming point number two is in play, I did a search for “Greek bank deposit outflows“. Three stories from today popped right up. Here are two of them.

Run on Banks Accelerates

Please consider ECB Halts Emergency Funding Hike to Greek Banks.

The European Central Bank on Wednesday did not raise a ceiling on emergency funding for Greek banks in a weekly review for the first time since February, a banking source said, adding financial pressure as the country scrambles to stay solvent.

Greek banks have survived on the emergency liquidity assistance (ELA) since largely losing access to capital markets and the ECB’s main funding window.

The ECB has been raising the cap on ELA in increments, but there has been opposition from within the bank to doing so each week on concerns it helps finance the Greek government. The banking source said the ceiling was unchanged because deposit outflows had slowed to low levels, leaving an untapped liquidity cushion.

But Greek newspaper Kathimerini reported on Wednesday that deposit outflows had picked up in the last days on worries over the possibility of capital controls. Official data on deposit outflows in April will be released on Thursday.

The ECB declined to comment.

Greek Bank Outflows Accelerate, Reached 5 Billion Euros in April
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