http://hat4uk.wordpress.com/2012/08/04/greece-anarchy-inside-the-troika/
http://www.zerohedge.com/news/ecb-saves-greece-certain-bankruptcy-again
Submitted by Tyler Durden on 08/04/2012 11:09 -0400
A few days ago we wrote that "Greece Runs Out Of Money. Again" because it did. The country, which is permanently locked out of the bond markets, would be down to a negative cash balance as soon as its August bond payment to the ECB was made. The reason is that the Troika continues to delay its decision. whether or not to hand over Greece its next monthly allowance. So with the country threatening to once again be on the front page as math rears its ugly head, the ECB has decided to take the bold step and admit that in lieu of even remotely credible collateral pledged and repledged in the ponzi repo system, the ECB has no choice but to expand the universe of eligible "collateral" against which it will provide cash. From Reuters: "The ECB's Governing Council agreed at its meeting on Thursday to increase the upper limit for the amount of Greek short-term loans the Bank of Greece can accept in exchange for emergency loans, the newspaper said in an advance copy of the article due to appear in its Saturday edition."
and keep this update as to the state of greek banks in mind as deposits have continued to plunge...
( anyone really think the greek bank run ended in July - max borrowing down to 60 billion as of the end of June and naturally lower today ? )
and
http://www.athensnews.gr/portal/1/57487
GREECE: Anarchy inside the Troika
Brussels, the European Central Bank, and the IMF are following different agendas – and it shows.
The European Central Bank has snatched Greek survival from the jaws of sovereign bankruptcy. It’s done this by securing interim financing in the form of additional emergency loans from the Bank of Greece, Die Welt reported today (Saturday).
It’s emerged that the ECB’s Governing Council agreed at its meeting on Thursday to increase the upper limit for the amount of Greek short-term loans the Bank of Greece can accept in exchange for emergency loans, Die Welt asserted.
Well zipperteedoo-dah what a wonderful day, but how will this meld with the euronotes that Greece is still printing (while the ECB quietly burns them on receipt) and the hard-to-ignore reality that technically, without a constant supply of Frankfurtergeld, the BoG would be insolvent itself? Nobody cares any more, for this is now the Bunker-whacky world of eurozone finance: short terms are safer than emergencies, toilet paper can bail out whole nations, and Berlin is the guarantor of last resort….except when the Bundesbank in Frankfurt suggests otherwise.
Thus, a decision made in private will have approximately a hundred times the effect of Mario Draghi publicly vowing to do Whatever it Takes – up to but not defining ‘whatever’.
However, I am here to inform you that this decision hasn’t gone down well with Christine Lagarde, Queen of the IMF. She has been stunned, I’m told, to learn that the recent transaction whereby private Bank Piraeus acquired the healthy assets of the otherwise bankrupt State Agricultural Bank of Greece (ATEBank) also involved (a) the debts of the Greek political parties being transferred to Piraeus bank at advantageous rates, and (b) the transfer of large amounts of cash (around €9m) abroad by a senior ATEBank executive during the immediate past.
What is it about elite Greek wealth, I keep on asking myself, that gives it an anti-magnetic repulsion effect causing its emigration to Zurich at the speed of Light?
But if the IMF frets about such petty-fogging details, the ECB and Brussels bigwigs are far more focused: in fact, so clear are they about objectives, a meeting about them is only a month away.
It is to take place on September 3rd (the anniversary of the outbreak of World War II) and prior to this, Luxembourg’s prime minister Jean Claude Juncker will visit Athens on August 22. Juncker will hold talks with Samaras two days before the latter will leave Athens and travel to European capitals in an effort to persuade Greece’s political lenders to grant the debt-ridden country an extension to its schedule for meeting fiscal targets. The Greek PM will meet with German Chancellor Angela Merkel in Berlin on August 24th, and French President Francois Hollande in Paris on the following day. Kissinger would’ve called this Shuttle Diplomacy, but to me it looks a lot more like Scuttle Delinquency.
However, what’s worrying Hellenic commentators in the meantime is that the Greek government keeps trying to table some “equivalent measures”…in place of ‘more tax, more axe’ – the bonkers idea that must one day trigger uncontrollable social unrest. The Troikanauts on the ground in Athens keeps on sweeping these alternatives under the table again, and plodding on in that Berlin-am-Brussels style that only they can manage. Further, they’re becoming adept at leaking to all and sundry how the Athens Coalition’s projections on tax collection are “ridiculously over-optimistic”.
So to sum up then, Mario Draghi is giving the signal that anything goes rather than having Greece default, Christine Lagarde is having an attack of moral vapours about the corrupt denialism, Troika NCOs are demanding every third firstborn in lieu, and Jean Claude Juncker is Officer in Charge of the Athens Coalition jumping through every hoop he can think of as a means of begging for mercy.
Somebody needs to explain to me why this Thing running Greece is called a Troika, as opposed to a Tricolore salad. And why you can never find some Balsamic vinegar when you need it.
But meanwhile, Tim Geithner sits quietly watching the whole ball of wool unravel. It’s all going to get increasingly interesting. Stay tuned.
http://www.zerohedge.com/news/ecb-saves-greece-certain-bankruptcy-again
ECB Saves Greece From Certain Bankruptcy. Again
- Bond
- European Central Bank
- European Union
- Greece
- Gross Domestic Product
- International Monetary Fund
- Newspaper
- Reuters
A few days ago we wrote that "Greece Runs Out Of Money. Again" because it did. The country, which is permanently locked out of the bond markets, would be down to a negative cash balance as soon as its August bond payment to the ECB was made. The reason is that the Troika continues to delay its decision. whether or not to hand over Greece its next monthly allowance. So with the country threatening to once again be on the front page as math rears its ugly head, the ECB has decided to take the bold step and admit that in lieu of even remotely credible collateral pledged and repledged in the ponzi repo system, the ECB has no choice but to expand the universe of eligible "collateral" against which it will provide cash. From Reuters: "The ECB's Governing Council agreed at its meeting on Thursday to increase the upper limit for the amount of Greek short-term loans the Bank of Greece can accept in exchange for emergency loans, the newspaper said in an advance copy of the article due to appear in its Saturday edition."
As a reminder, on July 20 the ECB pretended to act in a prudent fiduciary capacity and halted the acceptance of worthless Greek bonds as eligible ECB collateral. Naturally, this was merely an epic case of sweeping under the rug, because bonds eligible for traditional collateral had already ran out, even as the ECB greenlighted the continued provisioning of funding via the Emergency Liquidity Assistance, or ELA, in which the pathway of repledging a liability as a money good asset took on one extra step by using a national central bank as an unnecessary intermediary. The reason: merely to obfuscate the fact that actual money good collateral, and by implication, assets, no longer exist, allowing the Eurosystem to accept more and more worthless "assets" in exchange for frashly printed euros.
This is precisely what just happened:
Until now the Bank of Greece could only accept T-Bills up to a limit of 3 billion euros ($3.70 billion) as collateral for emergency liquidity assistance (ELA) but it has applied to have this limit increased to 7 billion euros, the daily said, citing central bank sources.The ECB Governing Council gave this wish the green light, the paper said.The move should enable the Greek government to access up to an extra 4 billion euros of funds, the paper said, adding that this should ensure the country keeps its head above water until the "troika" of the European Union, the European Central Bank and the International Monetary Fund decide on the disbursement of the next tranche of money from its aid program in September.
So does this step-wise increase in the pool of eligible collateral mean that eventually each peripheral country will run out of assets pledgable for cash (which in turn is used to pay interest to the ECB and various other "Official" institutions)? Yes, at least under the current regime. Because when all possible assets that Greece has have been handed over to the ECB for safekeeping just so the country is "allowed" to stay in the Euro and continue to pay its institutional interest, all the while allowing for "privatization" asset sales to take place for various Western banks.Sadly, even if the ECB were to lower it eligible collateral threshold to zero, the fun will eventually end in a world of finite assets, because while one can print electronic money with the push of a button, an "asset" by implication takes at least some effort, and cost to create.This is just what we explained back in May, when we quantified just how much borrowing capacity unde rthe ELA Greece, which is now less than a shell of a real economy, truly has.We already posted a full run down from JPM on what the immediate costs from a Greek EMU exit would be (starting at €400 billion and going higher), but one point that bears repeating is just how much borrowing capacity Greece has under the ELA in the aftermath of today's news that the ECB is leaving Greek banks to fend for themselves until such time as the Greek recapitalization payment is wired over to Greece, which the ECB has defined simply as "soon." The answer: woefully inadequate, and certainly not enough to backstop the remaining Greek deposits of €170 billion as of the end of March (likely far less now), at €65 billion. And that's an upside estimate: as JPM says "The true maximum amount that Greek banks can borrow via ELA is likely though to be significantly smaller because not all loans are accepted as collateral via ELA." Remember: this is all just one giant game of chicken - Greece's Syriza has bet the farm that the cost from a Greek fallout is just too big to Europe and the terms of the hated "Memorandum" will be adjusted, while to Europe, on the other hand, the outcome to Greece, at least according to Europe and the IIF's Dallara will be "between catastrophic and armageddon." So... Who blinks first?
From JPM:Greek banks have run out of ECB eligible collateral already and can only access Bank of Greece’s ELA, but even with ELA, the collateral,typically loans, is not unlimited. They have already borrowed €60bn via ELA which, assuming 50% haircut corresponds to around €120bn of loan collateral. Outstanding loans are €250bn, so Greek banks have a maximum of €130bn of remaining loan collateral which allows for a maximum of €65bn of additional borrowing from Bank of Greece’s ELA. This corresponds to around 40% of Greek bank deposits which stood at €170bn as of the end of March. The true maximum amount that Greek banks can borrow via ELA is likely though to be significantly smaller because not all loans are accepted as collateral via ELA. The alternative is for Greek banks to be allowed to issue more government guaranteed paper but the ECB can, with a 2/3rd majority, block a steep and unsustainable increase in Bank of Greece’s ELA. This would effectively cut Bank of Greece off from TARGET2.Once TARGET2 starts unwinding, with a massive €644 billion claim on the Eurosystem by the Bundesbank, and the realization that an imploding heretofore "contingent" and suddenly all too real liability amounting to 25% of German GDP means an in-kind collapse in living standards, then the simmering German anger will go truly parabolic.
and keep this update as to the state of greek banks in mind as deposits have continued to plunge...
( anyone really think the greek bank run ended in July - max borrowing down to 60 billion as of the end of June and naturally lower today ? )
Greek bank deposits plunged in June, Bank Run is ending in July news reports
You must have already heard the news from Europe mentioning the plunge of bank deposits in Greece during June. About 7 billion euros have left Greece bringing the total household and corporate deposits inGreek banks down to 150B. The Greek bank run is expected to end though in July according to a report of a very popular Greek financial news portal. The report is in Greek and it discusses how the political stability and June’s election result have led many depositors to bring their money back to their bank accounts. The report has raised many doubts of its authenticity, despite the reporter stating that the statistics are coming from trustworthy sources.
and
http://www.athensnews.gr/portal/1/57487
| Credit Agricole faces $2.4 bn outlay to sell Emporiki | ||||||||
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France's third-largest bank Credit Agricole faces the prospect of shelling out more than 2 billion euros to offload the country's subsidiary Emporiki Bank, raising fears that it will be obliged to raise new capital.
The country's bank support fund has told possible buyers of Emporiki that it will approve a sale only if the struggling lender is fully funded and recapitalised before it is sold, a senior banking source said on Friday.
Credit Agricole has been trying to sell Emporiki to limit its 4.6 billion euro exposure to the country, but the bailout fund wants to avoid having to pump in further capital after Emporiki is sold to a Greek lender, the source said.
"The Hellenic Financial Stability Fund (HFSF) has set four eligibility criteria for the sale to go through; mainly the need for Emporiki to be sold recapitalised and fully funded," the banking official, who declined to be named.
The sale has drawn the attention of the country's three biggest banks. Eurobank and National Bank confirmed their interest this week but have yet to submit offers. Alpha Bank, meanwhile, said it has offered to buy all of Emporiki.
Kepler Capital Markets analyst Benoit Petrarque said that at least 2 billion euros would be needed to raise Emporiki's core Tier 1 capital ratio to about 10 percent, from roughly zero now. However, substantially more will be needed to protect the lender from future loan losses.
"There's a 2 billion euro gap on capital, but the big question mark is more on the level of conservatism they will put on the loan book," Petrarque said. "If you don't properly value the assets, your capital could be gone in a couple of months."
The HFSF is a major shareholder in all three lenders eyeing Emporiki, as well as the country's fourth-biggest bank Piraeus , after injecting 18 billion euros as part of the country's latest bailout.
Credit Agricole now looks to have no option but to recapitalise Emporiki if it wants to sever ties with a unit that has cost it 6 billion euros since its acquisition in 2006.
The global bank with roots in rural France has suffered a 21 percent drop in its share price this year, though the shares climbed 5 percent on Friday morning, outperforming a 3.3 percent gain in the European sector.
"Credit Agricole is not very well capitalised, so any more expense is adding pressure," said Exane BNP analyst Guillaume Tiberghien. "But in any case, for the stock price, getting rid of Greece is a positive catalyst."
Banks are under pressure to consolidate to survive a brutal debt crisis that has left them reliant on their central bank for liquidity while fears of an exit from the eurozone has triggered deposit outflows.
Analysts say that a sale of Emporiki to a Greek rival could kick-start a long-awaited mergers and acquisition wave in the battered sector, with state-controlled Hellenic Postbank expected to be among the next targets as the state considers privatisation.
The banks eyeing Emporiki have been told to submit binding bids Credit Agricole by August 8, two of the country's banking sources told Reuters on Friday.
Credit Agricole declined to comment. Eurobank and National Bank were not immediately available for comment. (Reuters)
and.....
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_2478_03/08/2012_455414
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