Arab Today, arab today greeces troubled banks take another hit
Last Updated : GMT 07:27:18
Arab Today, arab today
Arab Today, arab today

Greece's troubled banks take another hit

Arab Today, arab today

Arab Today, arab today Greece's troubled banks take another hit

Greek parliament in Athens
Athens - AFP

In blocking their last relatively normal route of financing, the European Central Bank has further weakened Greek banks which have for years been operating on life support, experts said Thursday.
From February 11, the ECB will no longer allow Greek banks to use government bonds, which are classified as junk, as collateral for its loans.
The move has a knock-on effect on the state, as Greek banks have been the main buyers of the short-term bonds that Athens has been routinely using to cover its running costs.
Greek lenders currently hold about 18 billion euros in government debt securities, according to Frederik Ducrozet, an analyst at the French bank Credit Agricole.
Athens insisted Thursday its banks were financially secure, noting they still had recourse to the ECB's emergency liquidity assistance (ELA) programme, which allows the eurozone's central banks to make emergency loans to troubled commercial banks.
Indeed, the ECB has given the green light to increase the funds available to Greek banks through this scheme to 60 billion euros ($68.5 billion), a banking source told AFP Thursday.
But Platon Monokroussos, an economist at Eurobank, noted that this form of funding was far more expensive.
"ELA constitutes a more expensive source of liquidity for Greek banks," with rates of about 1.55 percent compared to about 0.05 percent on current ECB funds, he said.
Gizem Kara, an analyst at BNP Paribas, said Greek banks called upon five billion euros through the ELA in January.
This figure is dwarfed by that recorded at the height of the Greek crisis in 2012 and 2013, when the Greek banks were drawing 100 billion euros of ELA funds every month.
- What will savers do? -
"The big unknown is the reaction of the Greek people," said Nathalie Janson, an economist at Neoma Business School in the northern French city Reims.
If savers start withdrawing their money from Greek banks in large numbers, it could provoke a run on the banks -- and the lenders could quickly run out of cash.
Dario Perkins, an economist at Lombard Street Research, noted that pension funds had withdrawn five billion euros in December.
"Various Greek officials are talking about 11 billion euros (of outflows) in January but they could be underestimating," he told AFP.
The access to ELA funding could help reassure savers that Greek banks won't run out of funds, however.
Greek Finance Minister Yanis Varoufakis said in Berlin Thursday that his government would do "everything in our power to avoid any default".
Greek banks have been effectively supporting the state since 2010 by buying up its short term debt.
But Jens Bastian, of the German foundation Friedrich-Ebert Stiftung, said they had failed in "their primary mission, which is to provide the real economy with rapid, affordable funds".
He noted that in November 2014, a small to medium-sized German company was able to borrow one million euros over five years at a rate of between 2.5 and 4 percent, while a similar Greek firm would have a rate of 6 to 8.5 percent.
Greece's four main banks -- National Bank, Piraeus Bank, Alpha Bank and Eurobank, which control 90 percent of the market -- have been recapitalised twice since 2013 but remain vulnerable.
Loans which may never be paid back account for a third of their balance sheet, analysts say.
Another problem is the plunging share price of these institutions, which makes it difficult if not impossible to attract the new shareholders that they need.

 

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today greeces troubled banks take another hit Arab Today, arab today greeces troubled banks take another hit

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today greeces troubled banks take another hit Arab Today, arab today greeces troubled banks take another hit

 



Arab Today, arab today
Arab Today, arab today Youssra depended on colored foam

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today EasyJet, Lufthansa among seven to bid

GMT 06:49 2017 Tuesday ,17 October

EasyJet, Lufthansa among seven to bid
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Fighters celebrate Raqa victory

GMT 06:07 2017 Wednesday ,18 October

Fighters celebrate Raqa victory
Arab Today, arab today Iran's Facebook shuts down

GMT 23:50 2017 Monday ,16 October

Iran's Facebook shuts down
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Sidem reveals plan to improve education

GMT 15:52 2017 Friday ,06 October

Sidem reveals plan to improve education
Arab Today, arab today British actress becomes fifth woman

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman
Arab Today, arab today Three killed, 360,000 without power

GMT 05:11 2017 Tuesday ,17 October

Three killed, 360,000 without power
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Mercedes says recalls 400,000 UK cars

GMT 06:56 2017 Tuesday ,17 October

Mercedes says recalls 400,000 UK cars
Arab Today, arab today Britain's Vauxhall to cut 400 jobs

GMT 10:53 2017 Sunday ,15 October

Britain's Vauxhall to cut 400 jobs
Arab Today, arab today Anoshka happy for reactions to her talk show

GMT 12:33 2017 Friday ,13 October

Anoshka happy for reactions to her talk show
Arab Today, arab today India to close colonial-era military farms

GMT 18:49 2017 Monday ,16 October

India to close colonial-era military farms

GMT 10:55 2017 Thursday ,12 October

Safaa Sultan happy for “Love School”

GMT 10:37 2017 Thursday ,12 October

Cara Delevingne accuses Weinstein

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha

GMT 12:02 2017 Saturday ,14 October

Conservation cutbacks put Brazil's

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 23:42 2017 Monday ,16 October

Better Marriages Make

GMT 07:02 2017 Sunday ,15 October

German minister sparks uproar

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 03:59 2017 Sunday ,15 October

US mobile carriers Sprint, T-Mobile to merge

GMT 11:37 2017 Saturday ,12 August

Fashion designer reveals her new collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday