Greek banks prepare plan to raid deposits to avert collapse – FT.com

This is currently the FT’s most-read article, so it’s a must-read. Check it out!

via Greek banks prepare plan to raid deposits to avert collapse – FT.com.

The story has triggered a very strong denial from Greece’s Finance Minister, therefore I believe that the FT’s source is probably highly reliable.

A deep haircut on Greek bank deposits, Cyprus style, will be very appealing to creditors, especially in Germany. As highlighted by the IMF, an effective solution to the Greek debt crisis will require massive write-offs, so a haircut on deposits would share the pain.

Of course, the haircut will be deeply unpopular in Greece but it will have been triggered as a last resort by failure to offer genuine reforms in Greece.

Thoughts?

Failure to agree to bailout increases probability of Grexit -Wolfgang Münchau – FT.com

This is an outstanding analysis by Wolfgang Münchau in the FT. It’s a must-read.

via Failure to agree to bailout increases probability of Grexit -Wolfgang Münchau – FT.com.

According to Wolfgang Münchau, Greece was right to call a referendum but he sees the result as too late to influence the outcome.

Personally, I think that the risks are increasing, both for Greece and the rest of Europe.

The next big question is:

How much longer will the ECB provide emergency funding to Greece’s banks, with Greece effectively insolvent?

Views?

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