Earlier this morning we noted that the ECB has now frozen the ELA cap for Greek banks in the wake of PM Alexis Tsipras' move to call for a euro referendum and the Greek parliament's vote to allow the poll to go ahead.
With €1 billion or more having already been withdrawn this weekend, the Greek banking sector faces an acute liquidity crisis and without access to more ELA, the game is over and capital controls are likely a foregone conclusion despite Varoufakis' contention that such an outcome is "a contradition of terms" in a monetary union.
The ECB knew this of course when the board of governors decided against raising the cap and indeed, the central bank has now confirmed that without further access to emergency liquidity, Greek banks likely cannot operate going forward and a bank "holiday" may now be necessary.
- ECB SAID TO SEE EXISTING GREEK ELA INADEQUATE FOR BANKS' NEEDS
- ECB SAID TO VIEW BANK HOLIDAY FOR GREECE AS NECESSARY
— Nectar Axais (@NectarAxais) June 28, 2015