Greek Banks In Worse Shape Then Estimated

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A report published by BlackRock Solutions finds a shortfall of 15 billion euros in Greek banks. They will have to draw plans to cover the missing cash, and this may include selling both good and bad assets.

As Greek banks are heavily exposed to Greek government bonds, the actual shortfall also depends on the PSI program, which is in trouble as well.

Banks in Greece are also suffering from a “slow bank run”. Deposits are falling and withdrawals are rising. The process intensified during November, after the crisis deteriorated with the referendum initiative.

And now, with the breakdown of PSI talks, the bank run could intensify once again, with the situation already being bad. An executive official of a Greek bank said that “It would appear that the picture is worse than we had originally estimated”.

The next steps in the process are an examination of the BlackRock report by the Bank of Greece, which is then due to provide the report to Greek banks at the beginning of February.

The Boston based Bain & Company, related to US presidential hopeful Mitt Romney, is providing assistance to the Bank of Greece with this.

The situation of Greek banks has an impact on the euro. For more on the EUR/USD, see the euro/dollar forecast.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.