Fear of Greek Bank Runs Grip Markets
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The situation with Greek banks may have just gone from bad to worse as bank runs may have depleted capital levels at as many as four banks to levels so low that the ECB can't help.
Reuters reported mid-day that the ECB had monetary policy operations stopped with some Greek banks since they have not been recapitalized. The ECB only works with solvent banks and up to four Greek banks had capital levels "so depleted they were operating with negative equity capital." These banks may still be able to go to the Bank of Greece for emergency liquidity assistance (ELA), Reuters reported.
Since Monday, reports of bank runs in Greece have been prominent. The central bank in Greece said at least $894 million was pulled out of banks on Monday as depositors fear Greece would be out of the Euro by the end of the week. A similar amount was said to be pulled out on Tuesday.
National Bank of Greece SA (NYSE: NBG) is down 12 percent, moving to the lows of the session following the Reuters story.
Reuters reported mid-day that the ECB had monetary policy operations stopped with some Greek banks since they have not been recapitalized. The ECB only works with solvent banks and up to four Greek banks had capital levels "so depleted they were operating with negative equity capital." These banks may still be able to go to the Bank of Greece for emergency liquidity assistance (ELA), Reuters reported.
Since Monday, reports of bank runs in Greece have been prominent. The central bank in Greece said at least $894 million was pulled out of banks on Monday as depositors fear Greece would be out of the Euro by the end of the week. A similar amount was said to be pulled out on Tuesday.
National Bank of Greece SA (NYSE: NBG) is down 12 percent, moving to the lows of the session following the Reuters story.
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