Following yesterday’s news that the ECB is now running simulations on what a Grexit would mean for Greek bond prices (spoiler alert:Â
“fundamentals” suggest a 95% loss), overnight we got more confirmation that Mario Draghi continues to tighten the screws on the Greek sovereign corpse, when Bloomberg reported that the ECB once again raised the maximum amount of emergency liquidity available to Greek lenders by €400 million, but less than the Greek central bank requested, people familiar with the decision said.
The increase was approved by the ECB’s Governing Council on Wednesday, the people said, asking not to be identified as the council meeting was private. Greece requested about 900 million euros, one of the people said. The increase should take ELA to about 70 billion euros. Policy makers raised the limit by 600 million euros on March 12, after a boost by 500 million euros to 68.8 billion euros on March 5. Greek banks haven’t used all their ELA and have a total of about 3 billion euros in liquidity available, one of the people said.
However, not a single penny from this additional emergency “liquidity” would enter the economy, as all of it was merely provided to offset the ever faster Greek bank run because as Reuters reported, on Wednesday Greek banks saw deposit outflows of €300 million, the highest in a single day since a February deal with the euro zone that staved off a banking collapse, two senior Greek bankers familiar with the matter said on Thursday.
“The uncertainty over the lack of progress in negotiations and the negative newsflow has affected sentiment,” one banker told Reuters. “It’s not a huge amount but the worry is whether this is the start of a trend that could get worse.”
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“Under the current climate, with worries of a ‘Grexident’, savers are unlikely to return cash to the banking system soon,” said another banker. “Outflows may continue ahead of this weekend.”
