Sunday, July 12, 2015

Greeks Face Six Months of Cash Controls

Capital controls will stay in place at Greek banks for at least six months, senior officials in Athens warned yesterday, The Sunday Times reports.

Leaders of the four main banks and finance ministry officials will meet tomorrow to discuss how to deal with the crisis after a run on deposits.

Options under consideration include a consolidation of four main  banks down to two, creation of a “bad bank” to house toxic loans, and a possible forced “bail-in” of depositors.

Tomorrow’s meeting is expected to approve new capital controls, which not only put a cap on withdrawals — Greeks have been unable to withdraw more than €60 a day for the past fortnight — but also strict limits on international transfers by the public and businesses.

And, of course, what good would a mainstream interventionist  be if he didn't raise the absurd inequality "problem."


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