This page has been archived and commenting is disabled.
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.
»
- 73374 reads
- Printer-friendly version
- Send to friend
- advertisements -
I was walking...then someone said..."RUN".....I Had No Choice....and looked back....I SAW the mushroom....I don't know if I saw a mushroom or the end of the world
KEV
So the ZH article today on Russia cutting off supplies to Ukraine and six other EU countries has been deleted without any explanation or apology?
Is this the article?
http://www.zerohedge.com/news/2015-01-14/russia-cuts-ukraine-gas-supply-...
yep, seems to be based on an old daily mail story from years back. Maybe that's why it's disappeared from the front pages of ZH. Some sort of redaction statement would have been appreciated to keep the sites reputation however.
Oh for christ sakes. It was explained to you 3:00 AM EST today. Why not sundance yourself off a cliff. If your looking for a statement, Piss Off. Another 17 week loser who wants us to apologize so he can tell his psychologist to double down on ABILIFY® prescription. Fucking cunt..
https://www.youtube.com/watch?v=tGymr78FtbU
.
tell us how you really feel :-)
yikes, I hope you dont ever get mad at ME! :-)
I hadn't spotted that. But, you know, mistakes happen.
What was immensely interesting for me was an English blogger - who shall remain nameless - who has a devious habit of plagiarising news/information articles from ZH - changing a few words and phrases - and passing it off as his own research. He managed to post an article about this event/non-event a few hours after it appeared on ZH. He's now being torn to shreds by his flock. And rightly so.
smacker, thiis ties in with what I've been writing since long: ZH has some excellent fields of competence, but it is weak on the european matters
btw, OT: Cameron wants to ban all encryption on your island, including WhatsApp. is UKIP going to denounce this plan on the floor of the EU Parliament? and earn a rare applause?
I don't think this incident reflects that ZH is weak on European matters. Maybe a little.
It is either a rare consequence of how news stories are disseminated and collected OR it was a deliberate plant to flush out a few bloggers like the English one I mentioned. These people essentially plagiarise ZH news material (and from others) but don't pay due credit to their source, thereby passing it off as their own research. This incident has caught them out, at least one of them. He got a hiding from his flock.
Will UKIP denounce Cameron? I doubt it, although it would be an interesting stake in the ground if they did. My gut feeling about UKIP is that once in power (if they ever got there) they'd be little different to Labour & Tories, just a few adjustments around the edges.
The reason being that most of The State (and government machine) in Britain is not run by elected politicians. That's just pap to fool the masses into thinking we have a democracy. It's actually run by big agencies of The State and nameless, faceless, unelected, shadowy figures behind the curtains. Including the monarchy, Foreign Office, MI6, MI5, GCHQ, Met Police, UKBA, Civil Service, banks, corporate sector etc etc. Britain is the archetypal "Corporate State".
It has always been thus and Cromwell fixed nothing. Joe Sixpack the voter hardly gets a look in.
Long olive oil (and it's Greece, so long weekends too).
What Greece needs now is a big tax increase.
Why not just make sex slavery compulsory for everyone 12-18.
I'm sure the Eurocrats would be please with that outcome - at least for a year or so - when they'll demand the age is lowered to 5.
Brussels apparatchiks: "We hate the smell of Greek bank runs in the morning."
Oh Fuck! Got Gold? Got Silver? Better hurry. Let the Games begin!!!
May the odds be ever in your favor.
Bank runs : sounds more like bank constipation to me.
Banks are safe, right? They have safes. And they don't need my small savings.
Banks dont even exist anymore the entire fucking system could be taken over by a non-for profit AI already . . . there are no physical papers or assets being negotiated with banks anymore, everything is "pretend".
You could even have Ai issuing loans based on automatic calculations and credit reports that credit systems could generate.
Quite frankly there is no reason to have a "for profit" banking system anymore, all these idiots working for banks do is sit around and say "Hi how are you doing?" everytime you walk in (if you even still walk in) only time I ever go to bank is withdraw CASH bundles..... just replace CASH with cryptographic coded recipets that an ATM can print out..... and write a phone app to check if the paper actually draws from a recorded balance.
There is no reason why an ATM shouldn't have the ability to "print" bank notes. . . the paper notes hardly even exist in circulation as it stands . . . a printed crypto reciept from an ATM would actually be harder to counterfeit than a bank note from the U.S. mint press.
CASH could be reborn as a form of debit points system (like a Metro-Card). . . . all you need is a piece of plastic a mag strip and some readers and a server somewhere . . . .
-Order checks online
-Check balance online
-Apply for credit card and get approved online
WTF is the point of bank employees??? ^^
We do not need banks.
http://professorfekete.com/articles/AEFMonEcon101Lecture2.pdf
Their purpose is to sell you stuff.
EU/IMF will need to run another stress test. When its not your money, everyone is on a good path.
Google: IMF stress test greece. Enjoy!
Anybody else here getting the sense that the shits gonna hit the fan soon?
Time to suck another couple Trillion from Germany's tits!
"Deposits recorded...the outflow continued, although banks say it is under control."
The banks say it's under control so no need to worry.
Gosh, I'd feel really relieved if I were a Greek bank depositor.
/sarc
Teaser to the story still showing on Ekathermini business page:
http://www.ekathimerini.com/ekathi/business
What's really in store for Europe, courtesy of the ECB:
https://www.youtube.com/watch?v=MlQY2adknwM
** cough ** cough ** Drachmas and Deutschmarks
'Greek tax remittances have plunged by up to 80%'.
Like I've been saying, during the impending world depression, the old expansion metrics will be replaced with contraction metrics, like the taxpayer participation rate, for one example.
* Is Brussels Burning?
And who the dickhead(s) in Brussel claimed that Greek can start to repay its debts few years back
UOOPA
Maybe they remember the fate of (Greek) Cyprus deposits, oh, a couple years back? Trust-in-the-security-of-bank-deposits, RIP.
Oh please, Greeks do what they always do, find a golden fleece somewheres else.
Wow, telling Greece to fleece King Pelias, so Jason can take the throne. I’ll bet you think you’re a genius. Greece already has two modes of currency.
Greece, Barnaby wants you to fleece him. Show him how it’s done. [victimized him] / lol
It started with PIIGS, now we are at PIGS. Italy is worse than Ireland. Greece is necking Italy. How are those labor market reforms working out?
http://www.bis.org/review/r150115a.htm
"We Bar-B-QE'd some folks."
We Euroed some folks...
Oh noes, a EU labor monkey just down voted me. He must fear NIRP and the loss of pension.
Lindsey W. said a long time ago that after the euro crashes, Americans will have two weeks to get out of all dollar based paper instruments. Still waiting to see the euro beast money-god fall. What could possibly happen, next?
Hummm...can't understand why? Maybe the banksters are just too greedy and have actually finally got all the money away from the little people, and into the hands of the never ending war mongers for the rothschilian bankster world domination population elimination profiteers. They did a good job creating the isrealli attack dogs that everyone is too afraid to confront to do it, eh!
So, OK babylon, you win?
Got popcorn and remote control for T-Vee?
https://www.youtube.com/watch?v=HBD5ETwlRjM
http://investmentwatchblog.com/the-us-retail-industry-is-collapsing-here...
Store cash at home now. Is it time?
I don't understand who would have been crazy enough to keep their money in a Greek Bank up to this point in time.
Bank Holiday and confiscation coming in 3, 2, 1.... Grexit. Monday?
THe European Spring is just days away.
It looks like the Charlie Hebdo effect didn't get the desired result.
Another, gremlins under your bed fear flopped.
Ready?
https://www.youtube.com/watch?v=WJiBVTTVa7k
Moar??
https://www.youtube.com/watch?v=MSHr4ubuD64
Trillion Euro coins for everyone... opah!!!
Greek not paying taxes.
Nobody could have seen this coming.
Condolences to Condoleezza Rice (aka, Cunt)
Well see the reason they did not see it comming. Obviously they have thier heads stuck up thier asses.
Fire up the presses boys! We have money to print!
Go long on wood pulp...
On my next vacation to Greece I will make sure to visit the bank ruins, after I will stop by the ancient temple ruins!
"liquidity"
Lucas Papademos, Greece's former prime minister, ran the Central Bank of Greece at the time of the controversial derivatives deals with Goldman Sachs that enabled Greece to hide the size of its debt.
"Debt is the highest reward that the devil can offer you for being a servant of his." - Greek citizen in line at the bank
There is only one fix: forgiveness of debt and a massive bail out of Greece by EU... anything short of that shall engulf the rest of Europe into a nightmare scenario within months
Only one little problem. If the EU or ECB gives Greece or Spain too much free money, the French public elects LePen and tells the EU to shove it. If France is cut in on the free money action, Ze Germans tell the EU to shove it. It is wonderful being in the burning building with no exits, isn't it?
Cash flow? What cash flow?! Come on, default already.
No extension will entail a ‘dirty’ exit from the bailout[Greek] FinMin warns of cash crunch in March, as ‘the money isn’t there’
Thursday, Jan 15, 2015
By Sotiris Nikas
Finance Minister Gikas Hardouvelis issued a fresh warning on Thursday about the need to safeguard the cash flow in the Greek economy, while European Central Bank board member Ewald Nowotny and European Parliament Vice President Olli Rehn said there is no chance of a Greek debt haircut.
...
Hardouvelis also noted that “we’re treading a thin line,” reminding that “foreign investors refused to participate in last month’s treasury bill auctions. They didn’t show up because they think the risk is way too high.” It is now estimated that Greek banks will find it difficult to refinance the T-bills held by foreign investors that mature in the first quarter of the year.
...
Nowotny did not rule out a Greek departure from the eurozone, although he described that as particularly dangerous. What he did rule out was a fresh debt haircut, saying that the ECB could under no circumstances agree to a new debt write-off for Greece.
Likewise, Rehn said it is highly unlikely Greece will be able to secure any write-off of its arrears to the eurozone, and that Athens must instead focus on a longer repayment period.
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_15/01/2015_546252
"European Parliament Vice President Olli Rehn said there is no chance of a Greek debt haircut."
As if it's up to him! Hey Ollie, debt that can't be repaid won't be repaid, and what you SAY is irrelevant.
Don't want to take the haircut? Then get scalped.
Then after the elections we can expect a default.
all rating agencies updated the status to trash
the politpromnence seekd exit via elections
the "friends" of Greece in the EU cry loud "DEFAULT".
board member Ewald Nowotny and European Parliament Vice President Olli Rehn said there is no chance of a Greek debt haircut.
A second "unexpected event" within weeks and a second surprise after Swiss taking the paraschute and jumping off the plane. After massive QE in US and Japan, it will be EU's turn now.
Anyhow, they need money for Ukraine and much more, then for Greece.
Or the "western" world folders.
Meanwhile, in Sweden...
https://www.youtube.com/watch?v=8Wp9iNINHMc
Standard Disclaimer: It's for the children.
stock's proprietary but free Asteroid Calculator, Download in Excel format here.
https://app.box.com/s/ocdlggvieo93cxmw304i
This calculator generates results for Asteroid energy in Joules, based on diameter, speed, density.
This energy is then converted into something we can wrap our heads around, equivalent nuclear bombs.
The Jan 26 2015 Asteroid is close, large, and equivalent to 6828 large Nuclear Bombs.
The most dangerous upcoming asteroids data looks like this, it is odd there is such a rash of near earth dangerous asteroids. Well this was postulated. Note the column on Equivalent Nuclear Bombs.
http://nukeprofessional.blogspot.com/2015/01/updated-january-asteroid-ri...
Prediction fulfilled
http://www.zerohedge.com/news/2015-01-03/gloves-come-germany-says-grexit...
Well at least something runs in Greece.
... >>> "Greek Bank Runs" ...
... aka ... diarrhea ...
Hey, question...don't Euros have S/N prefixes for area printed?(Last time I was in Europe was pre-Euro, Sicily, everyone slowly converting ) ...does anyone know the Greek printed s/n? Is there one?
This can only make things worse in the rest of the PIIGS.
http://www.globaldeflationnews.com/bank-failures-beginning-to-ramp-up-st...
I'm Portuguese but
if I was a Greek I would have ALL my money in Euros, or Dollars or whatever very well hidden under the matress because if Greece exits
it will be on a friday evening without warning and all your money will be converted into dracmas that by monday morning will have lost 90% of its value
But because I'm Portuguese and THE SAME WILL HAPPEN HERE maybe at the same time or soon after I'M DOING JUST THAT ALREADY FOR SOME TIME
shhhhh I just don't have it under the matress... its somewhere else safe
oh... and call me paranoid but EURO bills have a marking that tells the country where they were "issued"
I assure you that I have very carefully chosen 500 euro banknotes with only Netherlands, Belgium, Finland, Luxemburg markings
because I am very paranoid and I would expect even the paper notes be "converted" into escudos (the original portuguese currency)