18 May 2015
Greek collateral evaporates – Bloomberg
FXStreet (Mumbai) - As per Bloomberg report, Greek banks are running short on the collateral they need to avoid bankruptcy.
More and more emergency liquidity assistance from the central bank is being tapped by Greek banks as the deposits are fleeing the system. Economists say, in a worst-case scenario, lifeline would exhaust within three weeks, pushing banks toward insolvency. “We are in an endgame,” ECB Executive Board member Yves Mersch said in an interview with Luxembourg radio 100.7 broadcast Saturday. “This situation is not tenable.”
Meanwhile, it is also being reported that Greek lenders are also working with the country’s central bank on plans to collateralize additional assets.
The UK’s Channel 4 news reported on Saturday that an International Monetary Fund memo dated May 14 said Greece won’t be able to make an IMF payment on June 5 unless an accord is reached with partners.
Greek bonds and equities reflecting the concern
The two-year debt yield rose to a one-month high today, up 175 basis points to 22.66%. The benchmark 10-year yield rose 81.1 basis points to 11.432%. The yield curve is already inverted, highlighting concerns of the government honoring its payment to international creditors. Meanwhile, the benchmark Athens Stock Exchange dropped more than 1%.
More and more emergency liquidity assistance from the central bank is being tapped by Greek banks as the deposits are fleeing the system. Economists say, in a worst-case scenario, lifeline would exhaust within three weeks, pushing banks toward insolvency. “We are in an endgame,” ECB Executive Board member Yves Mersch said in an interview with Luxembourg radio 100.7 broadcast Saturday. “This situation is not tenable.”
Meanwhile, it is also being reported that Greek lenders are also working with the country’s central bank on plans to collateralize additional assets.
The UK’s Channel 4 news reported on Saturday that an International Monetary Fund memo dated May 14 said Greece won’t be able to make an IMF payment on June 5 unless an accord is reached with partners.
Greek bonds and equities reflecting the concern
The two-year debt yield rose to a one-month high today, up 175 basis points to 22.66%. The benchmark 10-year yield rose 81.1 basis points to 11.432%. The yield curve is already inverted, highlighting concerns of the government honoring its payment to international creditors. Meanwhile, the benchmark Athens Stock Exchange dropped more than 1%.