As before running out of cash Greece scrambles to ensure a funding deal with Europe, the European Central Bank is tightening the vise to the ailing banks in the state by curtailing access to emergency loans that are desperately needed.
The European Central Bank is now demanding the value of the security that Greek banks post at their own central bank to guarantee these loans be paid off by as much as 50 percent, in accordance with people that happen to be briefed on these sorts of discourses but who were not authorized to discuss them freely.
2009 Credit credit scoring agencies downgrade Greece on fears that it might default on its debt, Dec.
Using the value of the collateral being paid down therefore significantly, banking will be hard-pressed to get the money that they must survive.
And, these people say, in the event Europe and the Greek authorities remain for an impasse on an arrangement about austerity actions, these socalled haircuts can raise further.
The move emphasizes the hard line approach obtained by the E.C.B. toward Portugal as it presses the new government to reach an arrangement with its creditors.
May 2010 Greece and Europe reach a $146 million rescue package, depending on on austerity measures. Some economists say the individual could be killed by the cuts that are necessary.
Oct 2011 Banks agree to take a 50 percent reduction on the face-value of their Greek debt.
July 2012 Shares rise following the head of the E.C.B. states plan makers will do ''whatever it takes'' to save the euro-zone.
European leaders hashed out a deal to extend the bail out by four weeks, with caveats, February 2015.
A spokesperson at E.C.B. headquarters in Frankfurt declined to comment.
Mr. Varoufakis has often complained the E.C.B. is "asphyxiating" Greece by limiting the amount of statements that the banks can purchase from the government and keeping a tight lead on emergency loans.
The banking, in turn, have to provide sufficient security to obtain these loans, which today stand at 74 million pounds, $79.7 thousand, or more than half the amount of Greek domestic deposits.
January 2015 voters choose an anti- party. Alexis Tsipras becomes chancellor.
In exactly the same time, Mario Draghi, the president of the E.C.B., has made it clear that if Greece doesn't strike a deal with Europe he will eventually cease backing the Greek banks, which would unavoidably lead to capital controls and ultimate default.
Controversially, Greek banks have even started to concern bonds and securing a government guarantee, purchased the securities to procure short-term lending -- before he became the finance reverend, a training that has been excoriated by Yanis Varoufakis.
Also, these haircuts surpass those levied on Greek banks in June 2012, when crisis loans had soared to EUR125 thousand on stresses that Portugal would be made to leave the eurozone.
On April 8, as an example, the National Bank of Greece self-released EUR4.1 billion of six-month bonds that transported state support.
But with deposits fleeing the banking system and with non-performing loans -- early this year ahead of the radical Syriza government came to power, which had stabilized -- growing again, it has not been easy for banks that are Greek to come up with assets that are okay to underpin borrowing.
Under E.C.B. guidelines, the reserve bank of Greece assumes complete responsibility for the credit danger when it problems these crisis loans.
But the E.C.B. carefully monitors them, setting limitations and inspecting the security.
By requiring such large price reductions, the E.C.B. is making sure the same thing doesn't occur in Greece.
During the Cyprus crisis, Jens Weidmann, the powerful German member of the E.C.B.'s governing council, bluntly criticized the the top of the Cyprus central bank for inflating the worth of collateral to let distressed Cypriot banks to use more money.
The European Central Bank is now demanding the value of the security that Greek banks post at their own central bank to guarantee these loans be paid off by as much as 50 percent, in accordance with people that happen to be briefed on these sorts of discourses but who were not authorized to discuss them freely.
2009 Credit credit scoring agencies downgrade Greece on fears that it might default on its debt, Dec.
Using the value of the collateral being paid down therefore significantly, banking will be hard-pressed to get the money that they must survive.
And, these people say, in the event Europe and the Greek authorities remain for an impasse on an arrangement about austerity actions, these socalled haircuts can raise further.
The move emphasizes the hard line approach obtained by the E.C.B. toward Portugal as it presses the new government to reach an arrangement with its creditors.
May 2010 Greece and Europe reach a $146 million rescue package, depending on on austerity measures. Some economists say the individual could be killed by the cuts that are necessary.
Oct 2011 Banks agree to take a 50 percent reduction on the face-value of their Greek debt.
July 2012 Shares rise following the head of the E.C.B. states plan makers will do ''whatever it takes'' to save the euro-zone.
European leaders hashed out a deal to extend the bail out by four weeks, with caveats, February 2015.
A spokesperson at E.C.B. headquarters in Frankfurt declined to comment.
Mr. Varoufakis has often complained the E.C.B. is "asphyxiating" Greece by limiting the amount of statements that the banks can purchase from the government and keeping a tight lead on emergency loans.
The banking, in turn, have to provide sufficient security to obtain these loans, which today stand at 74 million pounds, $79.7 thousand, or more than half the amount of Greek domestic deposits.
January 2015 voters choose an anti- party. Alexis Tsipras becomes chancellor.
In exactly the same time, Mario Draghi, the president of the E.C.B., has made it clear that if Greece doesn't strike a deal with Europe he will eventually cease backing the Greek banks, which would unavoidably lead to capital controls and ultimate default.
Controversially, Greek banks have even started to concern bonds and securing a government guarantee, purchased the securities to procure short-term lending -- before he became the finance reverend, a training that has been excoriated by Yanis Varoufakis.
Also, these haircuts surpass those levied on Greek banks in June 2012, when crisis loans had soared to EUR125 thousand on stresses that Portugal would be made to leave the eurozone.
On April 8, as an example, the National Bank of Greece self-released EUR4.1 billion of six-month bonds that transported state support.
But with deposits fleeing the banking system and with non-performing loans -- early this year ahead of the radical Syriza government came to power, which had stabilized -- growing again, it has not been easy for banks that are Greek to come up with assets that are okay to underpin borrowing.
Under E.C.B. guidelines, the reserve bank of Greece assumes complete responsibility for the credit danger when it problems these crisis loans.
But the E.C.B. carefully monitors them, setting limitations and inspecting the security.
By requiring such large price reductions, the E.C.B. is making sure the same thing doesn't occur in Greece.
During the Cyprus crisis, Jens Weidmann, the powerful German member of the E.C.B.'s governing council, bluntly criticized the the top of the Cyprus central bank for inflating the worth of collateral to let distressed Cypriot banks to use more money.