EUROZONE-GREECE/BANKS-MARKETS-REAX Greeks prepare for worst, but Bank of Greece calls for calm

Record ID: 151719

  • Title: EUROZONE-GREECE/BANKS-MARKETS-REAX Greeks prepare for worst, but Bank of Greece calls for calm
  • Date: 19th June 2015
  • Summary: ATHENS, GREECE (JUNE 19, 2015) (REUTERS) VARIOUS OF PEOPLE WITHDRAWING CASH AT ATM MACHINES CASH COMING OUT OF MACHINE, MAN COUNTING BILLS PEOPLE AT ATM MACHINE MAN FOLDING FIFTY EURO BILLS WOMAN AT ATM WOMAN PUTTING BILLS IN WALLET MAN AT ATM CASH COMING OUT OF ATM, MAN COUNTING BILLS (SOUNDBITE) (Greek) ATHENS RESIDENT, CHRISTOS TRIVIZAS, PENSIONER, AGED 72-YEARS-OLD, SA
  • Embargoed: 4th July 2015 13:00
  • Keywords:
  • Location: Greece
  • Country: Greece
  • Topics: General
  • Reuters ID: LVA6TY20LSMR3S6BEO4LFQODFGEC
  • Aspect Ratio: 16:9
  • Story Text: Greek savers pulled more than one billion euros from banks in one day on Thursday (June 18), three senior banking sources told Reuters on Friday (June 19), with the pace of withdrawals accelerating since talks between the government and its creditors collapsed last weekend.
    The European Central Bank (ECB) governing council will hold a telephone conference call on Friday to discuss extending emergency liquidity assistance to Greek banks, two sources familiar with the situation said.
    Emergency funding has been rising steadily in recent weeks as Greek savers withdrew more of their cash because of worries over whether the country will default and be driven out of the eurozone.
    The withdrawals between Monday (June 15) and Thursday reached nearly three billion euros (USD3.39 billion dollars), representing about 2.2 percent of household and corporate deposits held by Greek banks at the end of April.
    There have been no lines or panic, just a quiet and gradual phase of withdrawals over worries whether a deal will be clinched with the country's lenders, according to bankers.
    Earlier this week the governing council, which includes the eurozone's 19 central bank chiefs and members of the ECB's executive, extended emergency funding to Greek lenders to 84.1 billion euros.
    If deposit flight continues to outpace emergency liquidity assistance, it could force Greece to impose capital controls -- as Cyprus did in 2013 -- to ration cash withdrawals and stop money leaving the country.
    Pensioner Christos Trivizas said he didn't believe the fear-mongering.
    "I believe most of what they are saying in the news is not true, it's manufactured in order to influence people," said the 72-year-old Trivizas, who supports his two unemployed sons with his pension.
    But many Greeks expressed fear over the looming possibility of capital controls.
    "(Capital controls) are very possible, there are huge outflows from Greek banks. It's very possible this thing we hope to avoid will occur. Of course if it happens, the next step is chaos and catastrophe," said Ioannis Simaresis, a 55-year-old economist.
    "It will be tough for a period of time, that's for sure. We are entering into a new era that is uncharted territory for me, it is completely unknown," said 55-year-old Eleni Leonida.
    The Greek central bank chief sought to calm worries and issued a statement on Friday saying the banking system was stable.
    Greek central bank chief Yannis Stournaras made the comments after a meeting with the coordinator of Greece's team negotiating with creditors, Euclid Tsakalotos, to discuss the deadlocked talks and the banking system.
    "The Bank of Greece governor confirms the stability of the banking system, which is fully secured by the joint actions of the Bank of Greece and the European Central bank," the Greek central bank said in a statement.
    The Greek central bank had said earlier in the week that reaching an accord was "an historical imperative" that the country could not ignore.
    "Failure to reach an agreement would ... mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country's exit from the euro area and, most likely, from the European Union," the Bank of Greece said in a regular report.
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