Greek bankers’ agony shortly before the “haircut”

Greek bankers are experiencing a suffocating feeling, admitting the banks are faced with a dead end which would be tough to avoid or resolve by finding a different way out.

Although the final decisions will not be announced until the coming Wednesday October 26, after the second Summit, it is almost certain they will have to accept at least a 50% haircut, which would result in a huge hole in their capitals.

The bankers are in a position to realize that such a development would be destructive since the market is without “oxygen” these days and the shareholders are unable to cover the losses at the moment.

On top of that, depositors have crouched in a corner, alarmed at the continuous rumours about the worsening of the already negative state of the banks and their probable nationalization. The result of that was the further deposit outflow which was noted last week.

However, this is a time when all depositors are afraid firstly of the country’s future and secondly of that of the banks. The debt remains the greatest worry of all and Greeks do not deem an exit from the Eurozone to be science fiction any more.

At the same time, bankers are wondering who will fill the gap of the shareholders’ 11-15 billion euro, a gap that could lead them to state control according to the rules of the EFSF.

A less negative scenario speaks of a smooth nationalization, while a more negative one presents a bank nationalization to the fullest, with core restructuring and definite losses for stockholders.
 
Whatever the case, depositors’ savings are safe and guaranteed.