Panic in Greece!
Jun14
on June 14, 2012
at 11:09 am
Here is a short insightful article from europe online magazine about panic and uncertainty over the Greek financial future. To quote the article:
We will have to wait and see what is to come after Sunday’s election outcome…
I’ve seen an article where it was explained that one problem with this is that when money moves from a bank in Greece to elsewhere, the Greek Reserve Bank has to guarantee to the ECB that the money is there to make the transfer, based on the rules of the ECB. If there is enough capital outflow then this guarantee can’t be given and Greece becomes cutoff from the European banking system, and they would have to face the fact that their banks are insolvent.