Greece news live: eurozone split over Grexit ultimatum plan as Greeks says they are being 'crushed' by Brussels
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French president Francois Hollande dismisses idea of temporary Greek exit as Slovakia and Finland say little chance of a deal today after EU leaders summit is cancelled
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2:24AM BST 12 Jul 2015
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• Greece news: Germany circulates plans for "temporary Grexit"
• EU summit cancelled as finance minister draft Grexit ultimatum plan
• Finance ministers discuss "temporary" Greek exit
• Tsipras: I'm ready for an honest compromise
• Creditors demand legislation on reforms by July 15
• Greeks left wondering what happened to their referendum 'No' vote
• EU summit cancelled as finance minister draft Grexit ultimatum plan
• Finance ministers discuss "temporary" Greek exit
• Tsipras: I'm ready for an honest compromise
• Creditors demand legislation on reforms by July 15
• Greeks left wondering what happened to their referendum 'No' vote
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The parlous state of Greek banks
A very useful note from Barclays this morning on the state of the Greek banking system. They note that even if a deal is struck, the financial system is in need of serious recapitalisation.
We already know that capital controls are here to say for another two months at least, and Barclays estimate banks have lost nearly 25pc of their total deposits since 2014. These outflows have placed serious stress on their liquidity position. They expect the ECB will choose to keep ELA at its current level on Monday.
From Barclays:
While the current collateral buffer (which we estimate at around €15bn) should allow Greek banks to keep operating if the ECB’s Governing Council approves a further increase in the ELA, we think it will not be enough to absorb any significant increase in deposit outflows in the event that capital controls are eased and banks are reopened.
A tiny collateral buffer limits the banks’ capacity to borrow ELA liquidity. Also we suspect that the remaining spare collateral is not evenly distributed among the four largest banks, and therefore some of them are likely to be in more of a stressed liquidity situation than the others, making them more vulnerable to any further bank run. Therefore, we believe that capital controls should remain in place for a long period even if there are positive developments in the negotiations and the ECB eventually increases the ELA ceiling.
