Eurozone will collapse...

[Osem]

They'll probably come up with some new 'rules' with which to fix the problem.

Originally Posted by Hugh

But legally they cannot lend further funds to an insolvent bank.

BBC

BBC changed its mind or ECB changed tune

Originally Posted by Carlos Carboni

BBC

BBC changed its mind or ECB changed tune

From that (updated) link

The European Central Bank says it not increasing its emergency funding for Greek banks, amid fears that Greece may default on its debts on Tuesday.

The decision not to raise the cap on aid to Greece increases the likelihood of bank closures and restrictions on cash withdrawals, analysts say.

That in turn could eventually result in Greece leaving the euro.

The ECB said that it stood ready to review the decision and would work closely with the Bank of Greece.

The Greek banks decided to stay closed on Monday and most likely the rest of the week. A limit of 100 Euros will be imposed per person. The limit will include credit cards. No cheques will be cashed

The Athens stock market will be closed too.

Here comes the whirlwind ...

[nomadking]

Doesn't necessarily mean something is happening one way or the other. The Greek people would have continued to take the safest option, which is to withdraw as much cash as possible before the ATMs were closed off. They needed the cash anyway to spend on food etc.

Originally Posted by nomadking

Doesn't necessarily mean something is happening one way or the other. The Greek people would have continued to take the safest option, which is to withdraw as much cash as possible before the ATMs were closed off. They needed the cash anyway to spend on food etc.

Wow. Head in the sand, much?

Banks staying closed and imposing withdrawal limits "doesn't necessarily mean something is happening"?

On the contrary, it means something very serious *is* happening, and the authorities are taking last resort emergency measures to try to stop it.

The ECB will not increase the total amount it is prepared to feed into the Greek banking system, because it is not allowed to provide liquidity beyond the level where the system would be bankrupt. The Greek banking system has immediately - immediately - taken extreme measures to prevent capital flight. This tells you everything you need to know about how close the Greek banking system itself has come to outright collapse.

This, by the way, is not even the same issue as the one the Greek government has been negotiating with the Eurozone over, for the past several days. Those negotiations are about making loans to the Greek state to enable it to fulfil its various financial obligations. The failure of those negotiations will have many serious consequences, and the banking crisis that is now coming to a head is just one of them, and arguably isn't even the most serious.

[nomadking]

Originally Posted by Chris

Wow. Head in the sand, much?

Banks staying closed and imposing withdrawal limits "doesn't necessarily mean something is happening"?

On the contrary, it means something very serious *is* happening, and the authorities are taking last resort emergency measures to try to stop it.

The ECB will not increase the total amount it is prepared to feed into the Greek banking system, because it is not allowed to provide liquidity beyond the level where the system would be bankrupt. The Greek banking system has immediately - immediately - taken extreme measures to prevent capital flight. This tells you everything you need to know about how close the Greek banking system itself has come to outright collapse.

This, by the way, is not even the same issue as the one the Greek government has been negotiating with the Eurozone over, for the past several days. Those negotiations are about making loans to the Greek state to enable it to fulfil its various financial obligations. The failure of those negotiations will have many serious consequences, and the banking crisis that is now coming to a head is just one of them, and arguably isn't even the most serious.

It's not head in the sand. It just means that it doesn't only point one way. It is that people would have continued to behave as if the ATMs would be closed in the future. They would continue to take money out. Withdrawing money from ATMs hardly comes under capital flight. How much can they take out at one time? People still need cash to pay for everyday things.

It could mean that something is happening, but on the other hand they would not give any warning of it. Eg Any printing of a new replacement currency would be done in secret for 2 weeks beforehand.

Oh good grief.

Originally Posted by nomadking

It's not head in the sand. It just means that it doesn't only point one way. It is that people would have continued to behave as if the ATMs would be closed in the future. They would continue to take money out. Withdrawing money from ATMs hardly comes under capital flight. How much can they take out at one time? People still need cash to pay for everyday things.

It could mean that something is happening, but on the other hand they would not give any warning of it. Eg Any printing of a new replacement currency would be done in secret for 2 weeks beforehand.

ATMs will be closed on Monday. It is rumored to be limited to 100 Euros per person including credit cards, when and if they open on Tuesday

No new business transactions.

Limits on money transfers internal and abroad.

The new currency is allegedly ready in Canada/Switzerland, rumored to be called Ovolos,



an ancient currency predating the Athenian drachma.

http://www.bloomberg.com/news/articl...nt-greek-notes

http://www.theglobeandmail.com/globe...ticle24463037/

The Greek government has now finally bowed to the inevitable. There will be capital controls:

- Banks to stay shut until 7 July.
- Daily cash withdrawal limit will now be £42 (€60).
- No international cash transfers, except for those already arranged, or granted exceptional permission.

http://www.bbc.co.uk/news/world-europe-33305019

Crisis, what crisis?

[Derek]

£42??

Yep move along, nothing to see here. Everything is fine, remain calm.

The thing I find astonishing right now is the Greeks who only just seem to have woken up and realised what's going on.

I'd have been operating entirely by cash for weeks if not months by now, if I'd been in that position. There is absolutely no way I'd have allowed myself to find my money locked away on the wrong side of capital controls, yet there they all are, queuing at their ATMs as if this all a great big surprise.

Originally Posted by Chris

The thing I find astonishing right now is the Greeks who only just seem to have woken up and realised what's going on.

I'd have been operating entirely by cash for weeks if not months by now, if I'd been in that position. There is absolutely no way I'd have allowed myself to find my money locked away on the wrong side of capital controls, yet there they all are, queuing at their ATMs as if this all a great big surprise.

Most Greeks have no money in the banks. They operate in cash. But Credit/Debit cards have no capital control, provided they are used in Greece

The people that went to ATMs were the ones that were paid on Friday, most pensions were deposited on Friday morning, the people had to withdraw Friday, Saturday and Sunday (3 times their daily limit).

First line QFT ^

Even last September in Crete, nearly every business wanted cash, not credit/debit card.

Even the villa owner wanted cash when we arrived, rather than transfer beforehand.