US: ECB ‘Blackmails’ Greece – Bail-Ins, Bank Runs and “Grexit” Likely
By: GoldCore
GoldSeek.com
Thursday, 5 February 2015
ECB ‘blackmails’ Greece – “Grexit”, bank runs, capital controls and bail-ins likely
Shock announcement yesterday led to volatility in markets; turmoil in Greece
Stocks, commodities including oil and Greek investments fall
Euro gold surged from EUR 1,104 to EUR 1,126 per ounce or 2 per cent
Greek government bonds will not be accepted as collateral in accessing cheap ECB liquidity from February 11
Greek banks are believed to be heavily exposed to Greek government bonds
Banks in difficulty will have recourse to Emergency Liquidity Assistance (ELA) from Greek central bank but ECB has authority to block ELA
Greece now shut out of markets
ECB putting interests of banks over those of people … again
The shock ECB announcement that it is to remove vital funding to Greek banks and financial system led to volatility in markets yesterday and demand for safe haven assets – including German bunds and gold.
Euro gold surged from EUR 1,104 to EUR 1,126 per ounce or 2% in minutes after the announcement.
Financial carnage for Greek assets continued today. Greek borrowing costs leapt and bank shares were hammered this morning after. The Athens Stock Exchange FTSE Banks Index plunged 23 percent at the open before recovering somewhat. Three-year government borrowing costs leapt more than three percentage points to nearly 20 percent, leaving Greece utterly shut out of the markets.
The ECB decision to cancel its acceptance of Greek bonds in return for funding shifts the burden onto Athens’ central bank to prop up its banks and marks a further setback for the government’s attempt to negotiate a new debt deal.
The Greek government has rightly protested the move and called the ECB’s abrupt pulling of the plug on its funding for the Greece’s already very vulnerable banking sector blackmail and an act of coercion.
Just hours following a meeting between Greek finance minister Yanis Varoufakis and ECB Chairman Mario Draghi yesterday – which Varoufakis had described as “very fruitful,” – the ECB made a pre-emptive strike on the new government of the Hellenic Republic.
The Rest…HERE
