22/7/15: Another ECB Plasma Bag for Comatose Greek Banks

Another lift for Greek banks' ELA via ECB - a EUR900 million click, as previously:

Once again, the situation remains unaltered - Greek banks remain tied to ELA for funding, while capital controls cannot be lifted under small tick increases in ELA. In effect, we have a nurse replacing the empty plasma bag for a comatose patient. Nothing new, nothing dramatic...

16/7/15: Lifting Greek ELA by Eur900mln: Tiny Step, Strong Signaling

So ECB lifted Greek banks' ELA by EUR900mln to EUR89.9 billion today for the first time since June 23rd.

This suggests that Mario Draghi and the team ECB have found a way, for now, to set aside all concerns about Greek banks solvency and extend the lifeline to Greek banks until at least the end of July. The lifeline, however is not sufficient to cover deposits withdrawals that would occur if the Greek government were to lift capital controls.

Going forward - two-three weeks time, the ECB will have to deal with two issues at the same time:

• Increase ELA once again and do it either in small drip format (as today) - sustaining capital controls and possibly even extending these to cover corporate sector - or increase ELA by EUR5-7 billion to cover built up of demand for deposits monetisation and corporates' operational pressures; and
• Addressing the severity of ECB haircuts on Greek banks' collateral eligible for ELA. Here, the problem is severe: even before the mess with capital controls, Greek banks held poor cushion of eligible collateral. With capital controls, this cushion is even weaker as many households and companies have stopped funding their loans. The ECB will have to lower haircuts on collateral and/or broaden collateral pool - both moves would be hard to pass as it is now publicly apparent to all that Greek banks health is deteriorating rapidly. 

So today's moves is a small positive of largely symbolic size. Much work is yet to be done...

15/5/15: Greece on a Wild Rollercoaster Ride

Greece has become a BitCoin of Europe in terms of volatility, and, man, things are soaring and crashing on a daily basis now. Here are three snapshots of Greek Credit Default Swaps:

End of last week:

Mid-week this week:

Closing yesterday:

Meanwhile, the entire financial system of Greece is now on a weekly timeline courtesy of the ECB approvals of ELA:

One move by ECB down on ELA or laterally on collateral requirements, and the house of cards can come crashing.

Note: Sources: CMA and @Schuldensuehner.

13/4/15: Greek Deposits: Worse Run than in the Previous Iterations

Couple of interesting graphs on the Greek crisis via @FGoria

First, the ECB supports vs ELA for Greek banks: 

Notable trend above is for support switching. At the rise of first round of Greek crisis (post PSI), ECB funding was displaced by the ELA. The same pattern is now replaying once again.

Next: Greek banks deposits:

Again, the above shows the re-amplification of the crisis and continued decline in deposits levels, with acceleration in the rate of deposits flight. Outflows are now present across all maturities of deposits, and there is a strong increase in outflows for deposits with maturity in excess of 1 year.

The above charts are dire: covering the period for January-February 2015, we are witnessing a full-scale deposits flight (a funders' run on the banks) that is more extreme (in volume and composition of deposits outflows) than during the previous iterations of the crisis.