It was less than three weeks ago that, in the aftermath of the surprising announcement of the Greek referendum and the even more surprising cap on the ECB’s now clearly conditional ELA, the world was greeted to massive lines of Greeks waiting at ATMs where they were allowed to withdraw only €60 per day. Following the Greek capitulation, whose sole directive was recovering access to locked up bank funds, hopes were that Greek banks would promptly reopen, and now, according to a Greek senior banker cited by Reuters we know just when that will happen: Monday.
Reuters reports that “Greek banks will reopen on Monday, a senior banker told Reuters after the European Central Bank decided to increase emergency funding.”
Banks have been closed since June 29 after Athens imposed capital controls. “They will open on Monday,” the banker said.
The ECB on Thursday increased the cap on emergency funding Greek lenders can draw from the domestic central bank by 900 million euros.
A ministerial decision on the bank holiday is expected to be released later on Thursday.
A government-appointed commission responsible for vetting capital outflows since controls were imposed said it had approved applications worth 819.9 million euros until July 13.   Â
let me pop it up real quick
As Mario Draghi observed earlier today, Greek savers withdrew a whopping €8.1 billion in June, or about 6% of the entire deposit base, or about a quarter billion per day. Even under capital controls withdrawals continued at a pace of just under €100 million per day.
So what everyone is wondering is whether the events of the past 24 hours restored confidence in a banking system which, from the perspective of the ECB, was borderline insolvent three weeks ago, and is suddenly only “solvent” this morning because the Greeks voted the way the ECB strongly “hinted.”
If confidence has not been restored, and if Greeks continue to withdraw their savings, the new ELA increase should be sufficient to last about 4-5 days (or even less depending on how much residual panic there still is) before the new ELA cap is hit and has to be increased.
