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Greek Bank "Quarantine" Abroad Sparks European Selloff

Tyler Durden's picture




 

A large number of European countries have effectively quarantined Greece in a bid to minimize the consequences on their credit systems in case of a Greek "accident." As ekathimerini reports, the actions are being taken in order to shield themselves and minimize the danger of contagion in case the negotiations between the Greek government and the eurozone do not bear fruit. This has sparked broad-based selling across global risk assets but particularly in Europe. Stocks from Germany to Spain are having their worst day of the year, European sovereign bond risk is exploding higher (contagion Mr. Schaeuble?), and Greek bank bonds and stocks are getting crushed.

 

European stocks plunged...

 

and sovereign boind risk has contagiously exploded!!

 

After news broke (as ekathemerini reports) that neighboring countries have effectively quarantined Greece in a bid to minimize the consequences on their credit systems in case of a Greek “accident.”

Kathimerini understands that the central banks of Albania, Bulgaria, Cyprus, Romania, Serbia, Turkey and the Former Yugoslav Republic of Macedonia have all forced the subsidiaries of Greek banks operating in those countries to bring their exposure to Greek risk (bonds, treasury bills, deposits to Greek banks, loans etc.) down to zero in order to shield themselves and minimize the danger of contagion in case the negotiations between the Greek government and the eurozone do not bear fruit.

 

This quarantine was deemed necessary after the aggressive rhetoric of the new Greek government – particularly in the first few weeks after the election – regarding a debt restructuring, the non-completion of the creditors’ assessment and so on.

 

Special care was taken for the subsidiaries of Greek lenders, which have a major presence in neighboring states, to make sure that they would not proceed to new positions in Greek bonds, T-bills, deposits in Greek banks or interbank funding. The Greek government recently put press pressure on banks to think how they could get around the European Central Bank’s ban on the acquisition of more T-bills.

 

Another concern for local bank groups is the threat of a reduction in the Greek element of their subsidiaries in neighboring countries in case of turmoil in Greece. Don’t forget that the Cypriot-owned bank branches in Greece changed hands virtually overnight in March 2013 during the Cyprus bank bail-in process.

*  *  *

Greek banks are getting crushed as their bonds hit new lows...

 

Just under a year ago, everyone was calling Greece fixed... the miracle of Europe... crisis over...

 

Charts: Bloomberg

 

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Fri, 04/17/2015 - 08:15 | 6002433 stocktivity
stocktivity's picture

It's all Bullshit!!!  Futures already coming back.

Fri, 04/17/2015 - 08:53 | 6002521 Max Damage
Max Damage's picture

So thats why Bloomberg "broke"

Fri, 04/17/2015 - 08:17 | 6002439 Bill of Rights
Bill of Rights's picture

Quick pull the plug!

Fri, 04/17/2015 - 08:17 | 6002440 yogibear
yogibear's picture

What do you expect in a rigged market?

 

 

Fri, 04/17/2015 - 08:18 | 6002445 williambanzai7
williambanzai7's picture

EURO NAUSEA

Fri, 04/17/2015 - 08:27 | 6002464 falak pema
falak pema's picture

awesome WB7, and all it needs is a sequel by Simone de Beauvoir, seeing that FEMEN are now very much a part of the picture; the second sex is now toe to toe with the bearded deniers of the homo sapien race.

I volunteer the title to the sequel : End the DICK-tatorship of male financial chauvinism Draghi. 

Euro nausea and dick-tator machine phobia !

simone de beauvoir naked photo

Fri, 04/17/2015 - 08:28 | 6002467 williambanzai7
williambanzai7's picture

Incidently, it took balls to do what she did. And he really did react like a complete wuss. Also you will notice in the pictures that the big fat guard even seems sympathetic to her cause. Hilarious. Wait till you see my next post.

Fri, 04/17/2015 - 08:35 | 6002480 LawsofPhysics
LawsofPhysics's picture

Yes indeed, I agree.  These fascists are really cowards.  Of course nothing actually changes until bullets start entering their heads or they lose their head altogether...

same as it ever was...

Fri, 04/17/2015 - 10:54 | 6002947 williambanzai7
williambanzai7's picture

It is a warning shot to them when something like that happens. In the US she might have been shot.

Fri, 04/17/2015 - 08:21 | 6002453 buzzsaw99
buzzsaw99's picture

draghi will buy them

Fri, 04/17/2015 - 08:31 | 6002463 new game
new game's picture

exactly, just like japan, usa, every krugnation. put them on a shelve. like canning shit and sealing the lid. they can sit til archeologists discover stacks of paper labeled bonds and wonder wtf are these...

meanwhile everybody uses the euro and goes about their daily affairs. just a game by the ptb skimming off billions...

Fri, 04/17/2015 - 08:26 | 6002465 GetZeeGold
GetZeeGold's picture

 

 

Euro Girl will save us.

 

Euro Girl left that room without even touching the ground.

Fri, 04/17/2015 - 08:29 | 6002468 Ghordius
Ghordius's picture

but with a big grin on her face

Fri, 04/17/2015 - 08:33 | 6002475 LawsofPhysics
LawsofPhysics's picture

Yes, a generation of new "improved" self-centered masochistics.

Fri, 04/17/2015 - 08:39 | 6002486 Ghordius
Ghordius's picture

we looked unimpressive to our Elders, too. masochism is related to passion. I don't expect youth to know it all, this is something I wish we would. but passion? yes, please, more of it

Fri, 04/17/2015 - 08:22 | 6002459 Monetas
Monetas's picture

Off Topic: Have you ever seen ISIS .... change the motor oil in their vehicles .... their animal abuse is bad .... but, vehicle abuse .... is my personal .... line in the sand !

Fri, 04/17/2015 - 10:13 | 6002782 Element
Element's picture

They also refuse to remove the heads to check for fuel blow-by which accelerates the breakdown of motor oils. A clear double standard.

Fri, 04/17/2015 - 08:27 | 6002466 GCT
GCT's picture

Gotta scare the sheeple into more debt servitude.  The experiment in Greece is going to plan. Brussels and the politicians could care less about the population of any EMU country, otherwise they would allow it on every EMU countriy's ballots in the form of a referendum.  Sheep are not allow to think or even vote!

Scaring and lieing is alot better as an end to a means.

Fri, 04/17/2015 - 08:35 | 6002479 Ghordius
Ghordius's picture

ah, that's the hallmark of a classic conspiracy theorist! the assumption that there is always The Plan, and that everything goes according The One Plan

there are plenty of political parties in the EMU countries that argue for more referenda. interestingly, the electorate is usually unimpressed by them

you do realize that you put 18 different polities into one giant pot, don't you? do you think Greeks would vote for an exit from the EUR, for example?

Fri, 04/17/2015 - 08:56 | 6002537 Niall Of The Ni...
Niall Of The Nine Hostages's picture

Yes, there are plenty of political factions. They may think themselves different, and the colours on their ties sometimes are. But all European parties with any chance at achieving power are bankster fronts who never disagree with the local banksters on any important issue.

Everything is going to plan. Everyone who matters has been shielded from the impact of a Greek default. Now the uppity Greeks can be made an example of without it ruining anyone's morning in Frankfurt.

Fri, 04/17/2015 - 09:06 | 6002563 Ghordius
Ghordius's picture

"bankster fronts"? interestingly, your words have some grain of truth in them. Europe is full of small, regional banks, which are often owned by regions/districts/provinces/Länder

and there, local politicians and local parties are... influential

nevertheless... your words smack me of projection

because those local european affairs aren't in the business of breaking Nations, they often bleed from this kind of moves

on the other side, The Vampire Squid Firmly Attached To The Face Of Humanity and it's ilk... are

Fri, 04/17/2015 - 08:29 | 6002469 LawsofPhysics
LawsofPhysics's picture

LOL, henceforth, the kleptocrats officially declare that gravity is illegal.

Fri, 04/17/2015 - 08:37 | 6002483 venturen
venturen's picture

If the NYT doesn't print it....it isn't true!

Fri, 04/17/2015 - 08:31 | 6002470 wmbz
wmbz's picture

Just another day in bizarro world. Nothing will come of it, other than more jawboning, and IOU's.

At some point everyone will tire of the shit show in Greece and move on to a new "crisis"

 

Fri, 04/17/2015 - 09:27 | 6002617 Stormtrooper
Stormtrooper's picture

Like when Californians turn on the water taps and mud flows out?

Fri, 04/17/2015 - 08:36 | 6002481 venturen
venturen's picture

Can't they just print more money....vomit printing of all currencies appears to cure everything else. Our news friends the the Iranians are at 

26,905.00 IRAN RIALS TO THE USD. Like the Commerce GOD said.....JUST PRINT IT! 
Fri, 04/17/2015 - 08:47 | 6002510 ANestIOS
ANestIOS's picture

so, what level of exposure can a subsidiary of a greek bank in albania/the entire balkans have? Clearly huge to bring down the CAC, the DAX not to mention IBEX and FTSE.

Bloomberg outage, chinese short selling, greek bank subsidiaries...take your pick - mine is that too many people/algos are too stretched in(profitable)  long positions and they would like to take some of the profitsbefore the w/e.

Fri, 04/17/2015 - 08:49 | 6002514 Jungle Jim
Jungle Jim's picture

So, what, if any, effect will this have on metals prices in the next ten days?

Fri, 04/17/2015 - 09:05 | 6002558 Stuck on Zero
Stuck on Zero's picture

None.

Fri, 04/17/2015 - 09:03 | 6002551 nicxios
nicxios's picture

"Kathimerini understands"...LOL making shit up as they go along. Refutations in 3..2..1

Fri, 04/17/2015 - 09:43 | 6002680 Mike Honcho
Mike Honcho's picture

Li'itle help here govnah', who would buy Greek bonds at all?  Is it not bad investing to throw money into that situation?  Not grasping it (possibly too much nocturnal Vodka and too little forenoon coffee).

Sat, 04/18/2015 - 05:25 | 6005837 georgesidi
georgesidi's picture

It's all a big fat smokescreen, Europe is dead and broke so they need a scape goat and someone to blame for all there troubles.

Sat, 04/18/2015 - 05:26 | 6005838 georgesidi
georgesidi's picture

It's all a big fat smokescreen, Europe is dead and broke so they need a scape goat and someone to blame for all there troubles.

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