At this point, regardless of whether Greece miraculously cobbles a last minute deal together and gets just enough funds to pay back the near-term debt maturities (long-term can be found here [11]):
And interest payments:
[12]
... to the IMF, it is too late to save the Greek bank system.
The key reason, as Reuters just updated, [13]is that the Greek bank run which we have been closely tracking in recent months, just saw its biggest 3 days surge perhaps in history, when Greek depositors yanked over €2 billion from local banks, an amount which means the latest ELA boost has already been depleted, and amounts to about 1.5% of total Greek deposits.
In context this would be equivalent to about $150 billion in deposit outflows from US banks in half a week, or about 10% of the total amount of currency in circulation.
Per Reuters, "Greek banks have seen deposit outflows surge to about 2 billion euros over the past three days, with the pace of daily outflows tripling since the collapse of talks at the weekend with creditors, three banking sources told Reuters on Thursday.
Talks between Greece and its euro zone and IMF creditors collapsed over the weekend in Brussels, leaving the country on the verge of a default at the end of the month and sparking fears of capital controls.
Before the collapse of talks, bankers said outflows had been ranging between 200-300 million euros a day.
A spokesman for the Greek central bank declined to comment on the figures, saying it releases data on deposits on set dates every month and would publish data for May on June 26.
We now expect more images such as this one hitting the social networks momentarily:
@zerohedge [14] @GreekAnalyst [15] @GreekFire23 [16] pic.twitter.com/xlaxns77xc [17]
— Ahmet Douas (@ahmetdouas) June 17, 2015 [18]
But that's just the first part of the bad news for Greek banks. The second one comes courtesy of Bloomberg's Yalman Onaran [19]who reminds us that it is not just a matter of liquidity (which is only there as long as the ECB keeps boosting its ELA allotment), but also solvency. To wit:
The four biggest lenders, accounting for 91 percent of the country’s banking assets, could see their 12 billion euros ($14 billion) of tangible core capital wiped out by mounting provisions as overdue and restructured loans default. Even if Greece reaches an agreement with European creditors to free up additional money, its next bailout will need to include a new round of funding for the ailing banks.
Bad loans rose last quarter as the economy slipped back into recession and Greeks delayed payments waiting for the new government to pardon debt. With the recovery stalled, the four banks -- National Bank of Greece SA, Piraeus Bank SA, Alpha Bank AE and Eurobank Ergasias SA -- could require 16 billion euros in additional provisions to cover losses if half of the 59 billion euros of overdue and restructured loans on their books sour.
“We had expected nonperforming loans to peak in the first quarter, but we now expect this sometime in 2016, subject to some kind of economic stability,” said Nondas Nicolaides, an analyst at Moody’s Investors Service in Athens. “There’s a high risk that restructured loans and others showing signs of trouble will slip back into default. It’s a possibility the banks might need another round of capital injections.”
[20]
Just replace "possibility" with "certainty" and the picture is complete. Spokesmen for National Bank, Piraeus, Alpha and Eurobank declined to comment which was to be expected. After all, what can they say?
In other words, the Troika - whose intention from the very beginning was to cripple Greek banks so badly and terminally that Tsipras and Varoufakis are forced to accept any terms hoisted on them as we predicted in January [21]- has succeeded. The only question is how long until the Syriza government admits defeat.
