Monday, 18 May 2015

Greek financial crisis may be near endgame

The euro has been rising in recent weeks, wreaking havoc on carry trades.

Still, Greece's financial problems may create more stress on the currency as the endgame to the crisis looks to be near. From Bloomberg:

Greek banks are running short on the collateral they need to stay alive, a crisis that could help force Prime Minister Alexis Tsipras’s hand after weeks of brinkmanship with creditors.

As deposits flee the financial system, lenders use collateral parked at the Greek central bank to tap more and more emergency liquidity every week. In a worst-case scenario, that lifeline will be maxed out within three weeks, pushing banks toward insolvency, some economists say...

“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.”

No comments:

Post a comment