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The Greek Bank Runs Have Begun: Two Greek Banks Request Emergency Liquidity Assistance
The first time the phrase Emergency Liquidity Assistance, or ELA, was used in the context of Greece was in August 2011, when Greece was imploding, when its banking sector was on (and past) the verge of collapse, and just before the ECB had to unleash a global coordinated bailout with other central banks including global central bank liquidity swap and unleash the LTRO to preserve the Eurozone.
As a reminder, this is what happened back then: "In a move described as the "last stand for Greek banks", the embattled country's central bank activated Emergency Liquidity Assistance (ELA) for the first time on Wednesday night."
"Although it was done discreetly, news that Athens had opened the fund filtered out and was one of the factors that rattled markets across Europe. At one point Germany's Dax was down 4pc before it recovered. The ELA was designed under European rules to allow national central banks to provide liquidity for their own lenders when they run out of collateral of a quality that can be used to trade with the ECB. It is an obscure tool that is supposed to be temporary and one of the last resorts for indebted banks."
Raoul Ruparel of Open Europe told The Telegraph: "The activation of the so-called ELA looks to be the last stand for Greek banks and suggests they are running alarmingly short of quality collateral usually used to obtain funding."
He added: "This kicks off another huge round of nearly worthless assets being shifted from the books of private banks onto books backed by taxpayers. Combined with the purchases of Spanish and Italian bonds, the already questionable balance sheet of the euro system is looking increasingly risky."
As a further reminder, this is how cryptically little the ECB has to say about its "last-ditch" liquidity bailout program:
Euro area credit institutions can receive central bank credit not only through monetary policy operations but exceptionally also through emergency liquidity assistance (ELA). ELA means the provision by a Eurosystem national central bank (NCB) of
- central bank money and/or
- any other assistance that may lead to an increase in central bank money
to a solvent financial institution, or group of solvent financial institutions, that is facing temporary liquidity problems, without such operation being part of the single monetary policy.
We bring this up because things in Greece just went bump in the night. Again.
Recall that as we reported three days ago, while Greece refused to admit that it was suffering a bank run ahead of a potentially game-changing election, it did report that "most taxpayers have chosen to delay their [tax] payments, given that the positions of the two main parties leading the election polls are diametrically opposite: Poll leader SYRIZA promises to cancel the ENFIA and even write off bad loans, while ruling New Democracy acknowledges the difficulties but is avoiding raising issues that would generate problems and fiscal consequences."
Well, yesterday we got some more details on the collapse in tax payments when Kathimerini reported that indeed as feared, Greek tax remittances have plunged by up to 80% compared to last year, in the process making a mockery of any Greek reforms.
Finance Ministry officials believe there will be no problem meeting the targets of the bailout program as far as the general government primary surplus, which amounts to 1.5 percent of gross domestic product for 2014, is concerned. There are, however, worries regarding the 2015 budget, as the year has got off to a terrible start in terms of revenue collections.
The target for January is 4.5 billion euros, but tax officials report that they saw no activity that would support that goal in the first 10 days of the month. Sources say that the decline compared to the first 10 days of 2014 ranges between 70 and 80 percent.
That's not the bad news. The bad news is that as we also speculated, and as Greek officials tried to cover up as usual, the Greeks have resumed doing what they do best any time their country is facing a grand crisis: walking to the bank and withdrawing what little deposits they have left. Or rather running to the bank.
Which brings us back to the topic of the Emergency Liquidity Assistnace, which as Kathimerini reported moments ago, at least two Greek systemic banks have reportedly resorted to, indicating that the liquidity situation in Greece is once again as dire as it was in the depth of the European collapse.
To wit:
Two Greek systemic banks reportedly submitted the first requests to the Bank of Greece for cash via the emergency liquidity assistance (ELA) system on Thursday, in response to the pressing liquidity conditions resulting from the growing outflow of deposits as well as the acquisition of treasury bills forced onto them by the state.
Banks usually resort to ELA when they face a cash crunch and do not have adequate collateral to draw liquidity from the European Central Bank, their main funding tool. ELA is particularly costly as it carries an interest rate of 1.55 percent, against just 0.05 percent for ECB funding.
The requests by the two lenders will be discussed by the ECB next Wednesday.
Bank officials commented that lenders are resorting to ELA earlier than expected, which reflects the deteriorating liquidity conditions in the credit sector.
Besides the decline in deposits, banks were dealt another blow on Thursday with the scrapping of the euro cap on the Swiss franc. Bank estimates put the impact of the euro’s drop on the local system’s cash flow at between 1.5 and 2 billion euros.
Deposits recorded a decline of 3 billion euros in December – a month when they traditionally expand – while in the first couple of weeks of January the outflow continued, although banks say it is under control.
A major blow to the system’s liquidity has come from the repeated issue of T-bills: In November the state drew 2.75 billion euros in this way, in December it secured 3.25 billion euros, and it has already tapped another 2.7 billion in January. Of the above amounts, a significant share – amounting to 3 billion euros according to bank estimates – was in the hands of foreign investors who will not renew them, so they have to be bought by the Greek banks.
Local lenders had also resorted to ELA in 2011 to cope with the outflow of deposits and consecutive credit rating downgrades of the state (and the banks) that made Greek paper insufficient for the supply of liquidity by the Eurosystem. In May 2012, due to the uncertainty of the twin elections at the time, local banks drew 124 billion euros in ELA to handle the unprecedented outflow of deposits.
And just like that, it's deja vu all over again, and the worst days of the summer of 2011 are ahead of us once more, only this time Draghi's "Whatever it takes" unconditional OMT bazooka has conditions, and anyway after today's SNB fiasco, what a central bank threatens, warns, begs or even does, may no longer even matter.
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Hah ha ha ha ha ha ha ha
And they said it was all fixed
well they are certainly not pulling the money to pay taxes... Long Syriza. Short Europe.
If you like your liquidity, you can drone some folks. Period. ;-)
Looney
The ZH articles in gray boxes are beginning to stack up. Starting to think there are lots of flashing red lights telling everyone the entire system is reaching critical wonkiness.
It's the story that won't go away. Like Einstein said about insanity: "Insanity is defined as repeating the same action only expecting a different result".
These bankers truly are insane.
If insanity is such than the people that have faith in the banking system are the same.
EU Bank Holidays in 3...2....1.....
I want to see a youtube video of the Banks running. Awesome!
Bank runs in Greece?
I know when I have the 'Runs' it aint a good thing...
Doesn't Greece look like they're about to collpase every 7.3826 hours, only to mysteriously come back from the dead?
The run on the bank is staged to induce fear. Friends there tell us that it is all a gambit for Syriza to loose strength. There are no lines.
Not staged. Just no lines. Idiots in the majority are standing pat. People with real assets are making massive withdrawels.
Greece is on the verge of getting kicked out of the euro-zone. Smart people want their euros in their hands, before the government waves their theiving wand and converts all accounts to drachmas ( or whatever they will call their new wastepaper ) at par.
People are delaying tax payments in order to pay those taxes later in Drachmas instead of euros.
Not hard to figure out.
IQ test:
Do you have your "B" grade Euros in the bank?
If answer is yes, you are a drooling moron.
Looking forward to the incoming Target2 divergence -- and Ghordos defense as to why its misunderstood and its actually a good thing for the Germans, because all the Spanish and Greeks can purchase brand new BMWs.
even Mr. Sinn had to retract some of his conclusions on Target2, and claimed he was misunderstood. and he, the founder of "Allianz für Deutschland" if memory serves me well, was the original critic of Target2 imbalances
I applaud the work of Mr. Sinn. I did read it, and I was among it's critics. all knowledge is based on one courageous man putting up a new theory and the others tearing it apart. what is left is the result of peer review. it's the academic/scientific method, and it's very good... in academia
Mr. Sinn is, though, not only an academic, he is also a politician. a difficult marriage of methods and scopes. interestingly, there is a tradition in Germany to distrust such overlaps of "social fields"
the net result of Mr. Sinn's "attack", though, was excellent. T2 imbalances are now monitored (more), and the ECB has changed it's policy on them
Apparently lots of Greek tourists will come to Switzerland. Why otherwise would they change their EURO's in Swissies?
Drachma~ula
Zombie Groundhog Day.
Interesting, right back where we started. Hey, let's do it again!!!..
https://www.youtube.com/watch?v=voCM0eUyG2c
I'm actually a bit amazed that the run didn't start sooner and this may be a bellweather for the future of the EU.
I.
Anyone with money in Greek banks is about to get Cyprus'd
There is a difference between insanity and stockholm-syndrome.
People who have faith in the banking system don't do so out of their own choice. They are forced to use fiat money and pay taxes with it.
Shit is showing some fraying. Fraying that affects the wallet is what finally will peoples attention. The band-aid over the open heart surgery that was 08' is about to fall off.
Politicians need to be included with bankers....politicians give bankers way to much room to do dangerous and stupid shit, all so together they can keep the world growing. By doing this politicians can give away free shit tokeep getting elected and bankers can make huge profits. Definitley croney capitalism. The problem arose when they all gave away to much free shit and took on to much debt to stay in office. There's no fucking hiding from the looming disaster now. Obama can try and put lipstick in his pig, but its still his pig.
Ukraine is just about cooked, Japan is close and Italy, Spain, Portugal and Russia are queuing up.
Just look at the corrupt system as the GMC (goverbank media complex).
Are the bankers insane for believing that they won't be bailed out, or us for expecting the system to collapse?
All that CTRL-P is bullish for HP ink and Dell pixels.
Spot on, spot on. We are at the point of breaking and the system is screaming it and CNBC and others are trying to hide it. Oil going down just to "hurt russia" yea right. Somebody either conned the president into trying to bust the bubble and blame it on russia or the president truly thought that doing this to oil would work on Russia. I truly think that the world economy isn't as well as they say including the US.
The president? Dude, the first thing you need to understand is that the president isn't allowed to make any big decisions. He's a puppet, nothing more. He's an idiot, a liar, and a sociopath, true enough, but don't believe for a second that he is in control of any of this shit. The bankers make the rules, get it?
Well, on the bright side Greece and the EU kicked the can down the road for four years. Long enough for certain people to move their money somewhere 'safer'.
I dunno about you but I'm not holding any drachma's... Although now seems like a good time to buy property on the coast...
Greek islands for (next to) nothing and the chicks are free.
wow, euro landmines
watch your step.
I haven't been to Greece in a long time to be honest. I wonder if it's still nice? And do you know a good realtor over there? IT really might be worth the effort to buy a small island now.
And the minute you buy it, they'll do the xenophobic shuffle and repo it cause you're a furrinner.
Or they'll let you keep it but tax the blood right out of your veins cause you're a furrinner.
Either way, you'll wish you bought one of those nice yachts you see in travel magazines.
Not repo. Something worse. Jail for not paying outrageous property tax. They won't sieze the land because then they can't inflict more tax on you.
The land is cheap for a reason. Owning any of it makes you a slave to the government.
"I wonder if it's still nice? " huge amounts of Germans and other Northern Europeans went to Greece for their summer holidays of 2014. the tourism season went reasonably well, and they came back quite satisfied
Right back where we started, hey CD, let's do it again!!!
https://www.youtube.com/watch?v=voCM0eUyG2c
Is there the equivalent of an American 2nd Amendement in Greece?
You don't really own property you can't defend. Especially in a society on the borderline of meltdown.
I strongly doubt they have anything resembling gun rights in Greece. However, due to their proximity to eastern Europe and MENA, I would be willing to bet that an AK is easier to lay hands on in or around Greece than in the US.
In Crete they have them hidden and any new AK from Albanians costs 400 euros in Albania and to smuggle it across 750 euros and over.
You do have a choice.
Greeks do not use the guns lightly though, the country is full of hunting guns as well. Italy used to be as well I do not know for today.
I lived in a border country with Greece for a couple years in the mid 90's ..... From my experience then, you could acquire almost anything easier then in the US. Even if it was illegal the police take a friendly bribe and go away. Yes, I would venture to say that AK's flow readily from Macedonia and Albania.
Agree, dont forget the corollary: When you confiscate private property, you must also be capable of defending it when the owner decides to have a go at you.
for the next couple thousand years. lololol
Bad idea.
The Greek government is inflicting incredible property taxes on landowners, and jailing people for non-payment, instead of siezing the property.
And you can't sell the property, because no one wants the tax burden.
By "safer" do you mean to something "shiny"?
I do.
But if you watch CNBC 'safer' means US Treasuries.
Wait what? Is the treasury actually buying gold again? Inquiring minds want to know...
Speaking of 'safer' , wouldn't you know it, gold and silver both opened down this evening. I guess everything is already fixed...
except they didn't and still bought boatloads of greek bonds on the percieved efficiency of free markets...er...central banks bailing them out sooo ELA me bitch.
Jim Ricktards said that BMW would open a factory on Lesbos financed by Chinese capital and employing Athenian ex- Molotov cocktail throwers at 4€ per hour...
Lesbos hey? That sounds like a bit of me that does. Might have to go over there and watch. Watch what's going down.
The Greeks don't want no freaks.
In (Golden) Eagles We Trust.
https://www.youtube.com/watch?v=Ms0VIKlp0CU
And the stuff that is not fixed is safely "contained"
Yes they did.. yesterday and the day before that. tomorrow they will say it again.. they just need to get through today...
In March 2010 they said a loan of 20 billion Uros would set Greece straight.
Well, I don’t doubt it at all that everything is fixed, just not the European.... Western finances.
Haven't seen yen cross all day . Bet he was busier than jumper cables at a mex funeral. Hope the best yc
I've been wanting to hear from YenCross too.
Yeah, where's YenCross???
What?
Duct tape and bailing wire doesn't count?
Pure AWESOMENESS.
The Worst thing is, Our "beloved goverment" promised all the loans would be paid back...how come the people always see these lies.
2nd. Germany won't allow the Grexit because Spain,Portugal and Ireland would be next and the whole utopia dream of one Europe,one parliament and one president.... (Reminds of a german chap Ein Volk, ein Reich, Ein Fuhrer...never mind) and the fall of the Nato, so next year another increase of the tax for the European citizen?
Between the ECB QE meeting and the Greek election, would YOU want to have ANY MONEY in an EU or GREEK bank????
Today I was making a wiring of 25K and suddenly a message popped up "Limits for this account have been reached"
Now, there was plenty of money on the account and I’ve never had that before. 2 hours later, everything worked again.
It happend right at the moment when the swiss frank was acting up.
it’s working capital so I need that to keep everything going.
Second weird thing is that I’m still waiting more than 3 weeks after a silver order that still hasn’t come in! And I ordered it at the largest bullion dealer in the country, so that’s also pretty weird... so today I felt the urge to order some more but from Germany.
Before I ordered, I called for their stocks, nothing in stock besides lunar II coins dragons, so I bought kilo coins.
After today, I’m starting to get that really uncomfortable feeling about everything...
Oh come on! Everything is fixed again. No worries, okay? Now if you would just get back in line please.
Not to worry, that silver will be put to good use building new channels of outflow for the water in Keynesian analog supercomputers.
nevemrind, but
order silver on monday from bullion dealer
arrives alaska 8 days later..
buy peculiar old silver on ebay
3 clicks and it arrives 5 or 6 days....
order cigars out of Philadelphia
at my po box 68 hrs later..
Sudden I hopped back in last week but only bought 30 ounces. The market was scary and still is. Still have many, many ounces I bought inthe 250 to 500 dollar range.
Still plenty of ammo on sale, and THAT will prove valuable.
Couldn't withdraw from my savings account yesterday..
What's left of it ;-)
Try Goldline, deliver to EU + Canada, Hong Kong, Japan, New Zealand, Singapore, South Korea, Switzerland, USA.
I'm holding out till everyone relaxes when EUQE starts, I dont think this things going down yet.
Fuck popcorn I need more burbon. Hard to keep up with shit when you got a job
Get a job on the street.... its like being on vacation everyday. Or the Fed..
let them eat baklava ....
This is the Winter of our Discontent.
All that frozen liquidity on them Investment slopes of Davos. I sense an Avalanche coming.
2015 is dark and full of terrors.
"There be monsters here."
--Henry the Navigator
We need money stat!
"I'm yer fuckin huckleberry"... indeed
Link down, nothing on the site. They jumped the gun. That "news" was set to go online next week. Operation Fear
Puts the SNB "panic" move into better perspective...
Switzerland has left the building...
He who panics first panics best.
I panicked back in 07, so I'm good...
EU RESPONSE: "LET THEM EAT DRAZMAS"
EUR-CHF at 0.9750
WTF!!!!! Shit got real!!
Yahoooo, gonna party tonight!!! Bring on the financial tsunami.
Hmm this is 2000 year old news
After the government representative, Sofia Voultepsi, stated in a mainstream media channel that in case of national elections the country will actually default, the leader of the Leftist party SYRIZA, Alexis Tsipras, claimed that the Greek PM is even capable of staging a bank run (!) in order to render his arguments convincing.
Wait a minute....How could there be a cash shortage....W T F?? Don't people put their money IN the bank (some even paying for the priveledge) and now the money is ?????????????? GONE? How could that possibly be. Is Liquidity another word for "We stole your fucking money and have no idea where it is?" Shouldn't someone be going to jail?
www.youtube.com/watch?v=-DT7bX-B1Mg
And... It's gone.
This is the most accurate representation of most of the banks nowadays
Open four savings accounts, use your checks at a different bank each week. Leave only enough to cover possible charges, emergency etc.
Your real savings go elsewhere (not 69 iphones taped to your body).
Chill, it's not real money, only euros.
As opposed to USDs which are moar realer!
And they're fluffier too...
' We'll have LESS flexibility ' after the elections.
OMG, the GReeks are out of money? That shit caught me off guard! LOLOL
On a serious note, I smell a big fat war brewing. I think, if something doesn't give in the meantime, end of 2015 early 2016. Oil prices down so the west can stockpile reserves (for the war effort) while cutting off Putins balls in the process.
That's not to say I support the idea or want anything to do with it. But plan accordingly I will.
You have no idea the political capital invested in the euro
Oh yes, I do. I was there when the EFTA, etc., original drafts for Brussels were established.
Even back then, some brave souls used to say that the continentals were just a buncha fucking Nazis trying to make individual countries obsolete in a preparatory step to the New World Order.
I had no clue as to what they referred.
Now, it's crystal clear.
Better fall in line, the NWO won that shit a long time ago. The rest is just politics.
I don't. However, I can take a rational guess. And, that would be all of Western Europe and North America. Switzerland, Austria and Sweden being sort of neutral--again. Vatican is all in for the Euro because it's an opprortunity for relevance, and it meshes with the church's quasi-socialist agenda.
We also "vastly underestimate what the Euro means for the Europeans, for the Euro area..."
http://www.zerohedge.com/news/2013-04-04/mario-draghi-responds-zero-hedg...
Eight years ago I told our resident Business School Economist/Banker/Director that the EU would break apart
eventually. He disagreed with my assertion in a public forum
and I have been reminding him of that assertion for the last seven years. I have not long to wait for real vindication in the case of Greece.
I love these vindications even if they are late coming.
Then again you could be slightly wrong.
Instead of breaking up, the EU could BLOW up.
It's a wonderful life for Greece, isn't it?
Meanwhile, gold is preparing to punch through 1300 like a tongue through a fart box.
How evocative.
He probably queered it.
triple entendre, folks!
Very good. No one remembers the original definitions any more I would bet.
For some reason rich text doesn't work on my tablet when the adblocker is enabled. Otherwise some bold type would have been in order.. .
Elton, is that you?
Probably good practice to not put euro banknotes printed in Greece in your mattress. Never know - so avoid those notes with the letter "N" in the serial #.
Could this be the beginning of a long drawn out collapse in our markets? If we see the price of Gold go thru the roof, I would seem to think, Yes.
Could Greece be the Butterfly effect we are dreading in the U.S.?
We already had the black swan...the cratering in oil.
Many butterfly effects should be anticipated.
Doesn't get any blacker than oil.
Obviously, you have never been to Atlanta.
I just laughed in Ebonics.
Did you make that same weird buzzing/grinding kind of noise that comes from somewhere in their throats?
Like they're hawking up a loogie?
"eep! eep!"
I got a white swan tramp stamp with all the money I saved.
You bet, Knux. amazing how all these little 'swanettes' show up afterwards.
"Gee, I did not expect that."
1.55 percent ?
Who cares, the Greeks don't, and it's gone.
"Emergency liquidity assisance" Yeah, that's the ticket. Just a little more liquidity and all wil be fine. /sheeettttittt
Boy that EU doesn't sound like all the NWO trumped it up to be. I say each man for himself. When the banks are out of money run to the bankers next because thems the scum that took it.
A message from the Hellenic people around the world. Thank you for the bailout Germany:
https://www.youtube.com/watch?v=Zvl9N9GdraQ
Given the election uncertainty, wouldn't it make sense for the Greek CB to get hold of as many Euros as possible whether it needs them or not? Kind of like trying to borrow money from your neighbors just before you plan to move.
If the sheeple knew what I, and many others, knew about the banks, and banksters, they would ALL be running from the banks, and into gold, silver, steel, and lead.
The banksters need to repay us.
The western decades old debt based monetary system has not only created artificial wealth, but population and immigration numbers that should not exist. What happens to the latter when the DBMS fails?
Its going to be running dead not "Walking Dead".
And right on cue,
World Bank recommends Russia follows Greek model of crisis recoveryWTF!
I take it that the world bank didn't recommend selling ust and buy rubles whilst they be cheap...
;-)
Awesome. It might work for them. They were forced to buy jets with their last loan any way... Not like it helped anything get better.
They must have thought He-Man would save their economy from Skeletor.
"The people of Eternia will see you kneel before me, just before you die!"
The Swiss issue is impressive but I think the real news item is Obama sucking up to the Cubans before the Chinese get their drilling rigs set up.The Castros can't last much longer and there is a whole population to exploit as debt slaves.
Cuba has always been a political poison pill if you want to swing Floridas' electoral votes.This is the diplomatic equivalent of searching for coins in the couch.Desperate...
Oddly enough,when the mafia had to cut and run,it was a perfect example of capitalism in action: Casinos,brothels and hotels,real estate,etc. HIGH YIELD,and HIGH RISK....
Contrast the Cuban/US history with the current situation in the Ukraine.....
As these bank runs get more and more common - we should do the best out of it and declare it an international sport. Like the Olympics.
I can see it. Equipment. Training. Techniques that would evolve into specialized individual events. Teams. Oh yes. A reality show where they play for their own money. Mainstream television would love it.
We'd all crowd around the TV to see which country is up next.
This week-- Russia! Hee, hee, hee, haw, haw, haw. Who you threatening now you fucking Ruskies?
Then-- Greece! Gnuck, gnuck, gunck. Stupid cornholers. All crooks anyway.
Japan! Holy hell, stupid Japs in melt down mode. Get off the island already. See how silly those little people look Har, de, har, har.
America! Holy shit, that's us!!! Run to the Goddamn bank, ruuuun!
They'll just find increasingly obscure ways to bail them out over and over again
Zimbabwe going global. Print until your currency dies.
Greece keeps getting bailed out.
Leaky boat.
No worries
With 26 letters in the alphabet, there are infinite acronymic solutions yet to be created
Add in some Windows fonts, and we've got an eternity of bailouts remaining
What a load of shit. Banks can borrow expensive money from ELA for 1.55% but the government has to pay many multiples of that.
Why can't they lend to people for 2% so they can at least keep their houses so as not to destroy the social fabric totally?
Welfare is only for the TBTF because they are so systemically important. See it's trickle down theory. You pay your taxes, they use the money to bail out the corporations and the CEOs take home big bounuses and they may or may not take your job away from you. Then they give you your money back as a paycheck for your work, or as unemployment and you pay tax on it again.
It's real clear that QE hasn't worked. When will the politicians try addressing the structural issues rather than merely treating the patient with painkillers?
You're funny. You think they want to fix this.
The original aricle fron Ekathimerini, a right wing Greek Oligarch owned media outlet, has been deleted. Thanks Tyler for preserving their wit and reports