The Corner | April 29, 2015 | Amid speculations about a Greek deal (see examples of the bipolar opinion landscape here and here), market makers seemed more apeased yesterday but still have their doubts about the post June situation. “The yield on 3-year Greek debt remains very elevated and suggests that ‘market access’ is unlikely to be afforded to Greece at acceptable interest rates any time soon,” experts at BNP commented.
ATHENS | By Marios Zachariadis via MacroPolis | While capital controls might be an appropriate intermediate solution for Greece as argued by Professor Sinn in his recent Financial Times note, Professor Sinn misses or misrepresents the picture on a number of counts.
MADRID | Sean Duffy | ECB tightens the squeeze on Syriza government ahead of today´s proposals from the Greek Goverment for a loan extension.
MADRID | The Corner | Markets seem optimistic about the deal between Greece and its creditors (a government spokesman said they aim to reach a compromise today), although analysts are still wondering whether there have been any advances in the negotiation. “At least the ECB decided to a slight increase in emergency funding (ELA) for Greek banks on Wednesday,” a Barclays’ Alberto Vigil said. “But we still don’t know which reforms the Greeks have agreed on.” The ECB had already raised the ELA available to Greek banks by 5 billion euros to about 65 billion seven days ago.
MADRID | By Ana Fuentes | The ECB will be the main actor in the Greek crisis today. The Governing Council of the Frankfurt-based institution is meeting not to discuss monetary policy but to decide whether it maintains the emergency liquidity assistance (ELA) to Greek banks, which is crucial so the country can stay in the euro club –something that, in spite of propaganda and short sellers, both Athens and Berlin desire.
By Marios Zachariadis via MacroPolis | At first glance, the potentially catastrophic consequences of Grexit on the rest of the Eurozone provide the Greek government with an important bargaining chip. However, the Greek government should take into consideration that Grexit is not the only possible alternative in case an agreement with the rest of the EZ cannot be reached soon.
MADRID | By JP Marín Arrese | Tsipras rebellion was ruthlessly quelled by the ECB governing board last night. Neither Greek sovereigns, nor publicly-guaranteed bond issues, will stand as eligible collateral for funding facilities, thus plunging the financial system into a crippling credit-crunch. The emergency liquidity arrangement managed by the local central bank severely caps new public financing to a meagre €3.5 billion amount. The new government faces the unpalatable choice between surrender or bankruptcy.
MADRID | The Corner | Despite the markets’ first negative reaction to the ECB’s restricting Greece access to its direct liquidity lines, Morgan Stanley analysts reminded on Thursday that nobody should be that surprised: in 2012, one third of the Greek balance sheets were financed by the ECB, and most via ELA. Plus, Greek banks can still get ECB liquidity if they use ECB eligible collateral.
Morgan Stanley brought up on Friday a clear graph on banking cross assets funded at the European Central Bank liquidity facility or the emergency liquidity assistance tools. One of the conclusions, analysts said, is that “only Greece has experienced a strong bank deposit outflow this year, although it is wo relationship advice rth noting that in Spain and Italy internal capital flows occur, too, towards the soundest and biggest banks.”…