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Greek banks prepare emergency plans for likely cuts in deposits. This is what a Financial Times publication claims.

The newspaper refers to sources from the banking and business community with knowledge of the measures. According to them, the plans calling for a 'haircut' of at least 30% on deposits over €8,000 are an increasingly plausible scenario for at least one bank.

It will be a Greek version of the bail-in (internal recapitalization whereby deposits above a certain limit are transformed into capital of the bank), which resembles the rescue plan agreed for Cyprus in 2013, FT says. Then depositors' money was 'confiscated' to allow banks to plug in their deficits. In Cyprus, the cut was applied to unprotected deposits of over € 100,000.

This plan may be implemented as part of the recapitalization of Greek banks, which could be agreed with creditors. "The haircut can be achieved within the overall restructuring of the banking sector after the return of Greece to the bailout programme," said the FT source. "This is not something that will happen immediately," he said.

Eurozone officials said no decision had been taken to wind up any Greek banks or initiate a bail-in of depositors, a process that would be started by the ECB declaring the banks insolvent or pulling emergency loans.

Banks have been closed since Monday, Greeks can only withdraw €60 per day from ATMs, while requests to transfer funds abroad have to be approved by a special finance ministry committee in co-operation with the Greek central bank. Two senior bankers from Athens said to the Financial Times that the liquidity reserves of the country can feed ATMs only until the middle of next week.

The referendum results will determine how quickly Greece will reach an agreement with creditors. Currently the issue of Greek banks' insolvency is not being discussed, but it is clear that banks will be influenced by how quickly the country will enter a new programme, one of the bankers argued.

Greek deposits are guaranteed up to €100,000, according to EU guidelines, but the Deposit Guarantee Fund only has €3 billion, which is not anywhere near securing all deposits in case of bank collapse, the FT publication points out.

With few deposits over €100,000 left in the banks after six months of capital flight, the banks have very few accounts in excess of €100,000, the publication adds. “it makes sense for the banks to consider imposing a haircut on small depositors as part of a recapitalisation. . . It could even be flagged as a one-off tax,” said one analyst for the Financial Times.

Meanwhile, Louka Katseli, President of the National Bank, rebuffed the FT publication on slashing deposits over €8,000.

Speaking to SKAI TV, Mrs. Katseli argued that the publication was 'completely false'. She maintained that deposits up to €100,000 are absolutely guaranteed. Katseli claimed she had said this in as many words for the FT, when they approached her to comment on the information. Katseli reiterated that none of the banks were considering such a scenario. She added, however, that these kinds of decisions are made by the ECB and the supervisory authorities. According to her, the banks under the supervision of the European Stability Mechanism are exploring all options, but they do not include haircuts on deposits of over € 8,000.

Asked how long ATMs were going to be supplied, Louka Katseli reiterated that liquidity is fully ensured until the end of the bank holiday – i.e. Monday evening. According to her, the situation thereafter will depend on the decisions the ECB will take on Monday morning. "ECB's decisions will define the framework of the bank financing in the coming days," said Katseli. She admitted that if there is no further increase in the funding through ELA, "then surely there will be a problem in the coming days."