While Greece is experiencing the nightmare of closed banks and capital controls, under threat of default, analysts are explaining that the next step is deposit haircut.
The discussed scenarios are fearful. The situation with banks has reached its utmost limit, liquidity appears to be sufficient only until the beginning of next week and the lack of a bailout programme for Greece means a termination of the aid from the European Central Bank to Greek banks through the Emergency Liquidity Assistance ELA, and even worse - collectability of loans.
As reported by the newspaper Ta Nea that refers to Bloomberg, in the case of default ELA collateral haircut could reach 75% or 90%, in which case banks would be obliged to cut deposits to the amount of 33 billion euro or 67 billion euro of all the 120 billion euro that are currently in banks. I.e. a default would affect between 27% and 55% of deposits.
Anyway, collateral haircuts have reached 23% as of today and, according to Bloomberg, deposit haircut would be necessary if the percentage exceeded 60%.
For his part, Greek Minister of Finance Yanis Varoufakis assured yesterday that there was no reason to bail in banks. However, more than a few people do not believe him because on Sunday he had claimed that the issue of capital controls was not on the agenda and several hours later it happened.
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