Saturday, June 27, 2015

It's Real Panic in Greece: ATMs are Running Out of Cash

Greeks line up at banks this morning.

Two senior Greek retail bank executives said as many as 500 of the country’s more than 7,000 ATMs had run out of cash as of Saturday morning, and that some banks may not be able to open on Monday unless there was an emergency liquidity injection from the Bank of Greece, reports Bloomberg,. A central bank spokesman said it was making efforts to supply money to the system.

Some banks were placing limits in daily bank note and ATM transactions. Yiota Kardogianni, a manager at a branch of Piraeus Bank SA, said cash withdrawals were limited at 3,000 euros ($3,350) daily and ATM withdrawals at 600 euros.

One banker said 110 million euros had been withdrawn from his institution as of 11:30 a.m. Athens time on Saturday.

Greek Prime Minister Alexis Tsipras’s has decided to hold a referendum asking people to rule on a proposal to unlock 15.5 billion euros in bankster aid for Greece in return for sales-tax increases and pension cuts.

Many are scared about the referendum. From Bloomberg:
“I’m here to take my mother’s pension out before the machine runs out of cash,” said Erato Spyropoulou, who was standing in a line of about eight people at one of National Bank of Greece SA’s ATMs. “It’s very worrying what’s happening because people don’t know what they’re being asked to vote for. It’s the last nail in Greece’s coffin.”...
“Greek legislation allows either the Bank of Greece governor or the finance ministry to impose capital restrictions,” George Saravelos, foreign exchange strategist at Deutsche Bank AG, wrote in a note to clients. “The extent to which this materializes will depend on the ECB decision over the next 48 hours as well as depositor behavior.”
Some branches of Alpha Bank in central Athens that normally open for business on Saturdays remained shut and one carried a sign that it wouldn’t open.
About 100 people had lined up at a Piraeus Bank branch at a central Athens street before it opened. Some said they had waited for about three hours. Once word got out that the bank wouldn’t open, one elderly woman fainted.
As an ambulance pulled by to take her away, others spewed vitriol at everyone from the Greek prime minister to Germany.
“Tsipras said he would turn things around, but things are only going to get worse,” said Stavros, a 61-year-old retired sailor, who was lining up to withdraw his pension. He said he was initially planning to go to the bank on Monday but decided to line up on Saturday when he heard about the government’s referendum plans.
He said he won’t be able to pay his mortgage if the banking system doesn’t open on Monday.

The Question: What have these people, in lines today, been waiting for? It's not like the crisis and possibility of capital controls have not been headline news in Greece.

The Lesson: Be prepared for financial crisis before panic. Wherever you live, keep some cash out of the banking system and under your mattress.


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