Trade with Greece
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situation, which will have a very negative impact
on banks.
In any case, though, and given any opportunity,
both the Governor and certain executives of the
Bank of Greece offer assurances that the banks
are safe, meaningfully adding, though, that every-
thing depends on the negotiations between the
government and its lenders.
How strong is the banking
system?
The trend of deposit outflows is the key to
answering this question.
“We can endure, so long as there are no huge
daily outflows of deposits, since we do not
engage in anything fancy, just everyday micro-
management. If, however, there is a meltdown
with the creditors, it is highly possible that we will
witness a new wave of deposit outflows,” say the
same executives, with marked concern.
In any case, though, the bankers stress that this
soap opera of a negotiation between the govern-
ment and the lenders must come to an end, as
soon as possible. “Each day of delay imposes an
increasing burden on the market, the businesses,
and, therefore, to the entire economy, the depos-
itors and the lenders. At the end of the day, this
burden falls on the —weak and, currently, already
overladen— shoulders of the Greek banks.”
This deadly combination leads with mathematical
accuracy to the collapse of the real economy, also
damaging the country’s image abroad.
“Today, the market is only functioning because of
the credit extended by suppliers to their clients.
This is the situation facing thousands of small
businesses. However, it cannot be sustained for
long, because it will lead to mass shutdowns,” say
the same sources.
The multiple warning signs of the
ECB
The decisions reached by central bankers in
Nicosia in early March, send multiple warning
signs concerning the banking system.
Clarifying his position in regard to reinstating the
waiver, i.e. the ability of Greek banks to use
Greek government bonds as collateral for ECB
funding, Mario Draghi raised serious concerns,
and gave clear instructions on what Athens
should do so as to restore —at the end of the
day— order in the Greek banking system.
“It is too early to talk about reinstating the waiver.
