And round 998, no such thing as failure, no such thing as losers, only bailouts and more bailouts, more central banks pumping the system up.....take every single thing you have been taught about economics 101 and throw it out, bailouts is what everyone should be taught about when learning economics, bailouts and central banks and how they pump up the system and never let anything fail, no such thing as free markets...greece is never going to default and will never be kicked out, this news right here right now is proof that greece will get everything and anything they want, the ecb is bowing down and raising funding caps, this shows you they will bailout greece and let them do what ever they want, thats why I laugh at all this news about greece and how everyone is so worried, there is no need to be worried, they will get yet another bailout and everything will be blue skies and rainbows....crisis? this isnt a crisis when you know they will get bailed out like every bank got bailed out here in the US, they can't and will not let failure run its course....failure no longer exists in this new economy. The European Central Bank (ECB) has raised the funding cap on its Emergency Liquidity Assistance (ELA) for Greece's banks, according to a CNBC source. The decision, made in a conference call Friday and first reported by Reuters, followed a meeting of the euro zone's finance ministers on Thursday, where the ability of the country's lenders to open up for business next week was questioned. It comes as a specter of a run on Greek banks is looming, after yet another round of failed rescue-for-reforms talks. The valuation of the Greek banking sector has fallen by nearly a third since the start of June as concerns about the risk of Greece leaving the euro zone grow. Live blog: All eyes on Greek PM as crisis mounts On Friday morning, banks were open in Athens city center and there seemed to be a steady stream of people making withdrawals at ATMs, as observed by CNBC. The mood appeared calm and there weren't any lines forming; it was difficult to judge whether the banks were any busier than usual on a Friday morning. Anadolu Agency | Getty Images Of course, measuring ATM queues doesn't take into account the number of people transferring money in other ways. Also, Greece is still an economy where many of the transactions that are done via credit cards in other Western countries are regularly done in cash. Yannis Stournaras, governor of the Bank of Greece, Greece's central bank, said on Friday that he "confirms the stability of the banking system." There are still a number of moving parts governing what will happen to Greece's banking system, however. Bank run or jog? Let's not forget, there has already been plenty of money pulled out of Greek banks. Capital flight out of the country's lenders has been steady since the financial crisis began in 2010, but it has intensified in recent weeks. So far this year, 40 billion euros ($45 billion) – around 25 percent of deposits - have left Greece's banking system, according to Citi estimates. On Thursday alone, deposit outflows were above 1 billion euros, according to a Reuters report. The flow of capital out of Greek banks ECB’s tough choices Greek banks have been able to cope with these outflows because of the ECB backstop. There is no doubt that Greek banks need this funding. Eurosystem aid - from the ECB and other euro zone central banks - is now around 31 percent of the banking system assets, according to Citi calculations. Emergency summit called as Greek default, chaos loom On Monday, ECB President Mario Draghi told European lawmakers that, so far, the bank had helped out Greek lenders to the tune of 118 billion euros ($133 billion) – about 66 percent of Greece's overall economy. At the end of 2014, that sum was only half the current level. Three options were under discussion at Friday's ECB meeting, according to CNBC sources with knowledge of the situation. The first was immediately stopping ELA, triggering a collapse of the banking system. The second was not increasing ELA – which would trigger capital controls, limitations placed on the movement of capital which are usually associated with struggling emerging market economies. The third was to increase ELA, which Greek banks had requested, and has now taken place according to a CNBC source, who declined to comment on the amount it had been increased by. A two-thirds majority would have had to be in favor of one of these options. - By CNBC's Catherine Boyle. CNBC's Annette Weisbach in Frankfurt and Katie Slaman in Athens contributed to this report.
By reading the news you might think that exiting Euro for Greece is a possibility but that is not. Here are the facts: Greek and European union both are in tough situations Greek people definitely want to stay in Euro and if their leader do something that kick them out of Euro, they will punish their leaders. Greeks are hurt but they don't know how to solve their problem Leaders know the situation and they know they should delay the deal to show that they were tough and they negotiated well so there wont be any unrest in Greece and everybody will accept the outcome. Market knows that and just waiting how they should play Euro/USD ratio. Most probably EURO will be shorted after the initial rally.
This Greek thing is funny to say the least... They go BK everytime somebody will lend them some money. Now they are proving that if you owe the bank a little they own you but if you owe them a lot you own the bank.
Thats what a central bank is for. Remember the Three Stooges response to the question "do the banks give you back your money" Curly responds "Sure.....they didnt used to..." Probably a quip on US bank runs 1910 ish, pre Fed. So whats going on in Greece?