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Greek banks prepare plan to raid deposits to avert collapse

by Kerin Hope | FT.COM | July 5, 2015

Greek banks are preparing contingency plans for a possible “bail-in” of depositors amid fears the country is heading for financial collapse, bankers and businesspeople with knowledge of the measures said on Friday.

The plans, which call for a “haircut” of at least 30 per cent on deposits above €8,000, sketch out an increasingly likely scenario for at least one bank, the sources said.

A Greek bail-in could resemble the rescue plan agreed by Cyprus in 2013, when customers’ funds were seized to shore up the banks, with a haircut imposed on uninsured deposits over €100,000.

It would be implemented as part of a recapitalisation of Greek banks that would be agreed with the country’s creditors — the European Commission, International Monetary Fund and European Central Bank.

“It [the haircut] would take place in the context of an overall restructuring of the bank sector once Greece is back in a bailout programme,” said one person following the issue. “This is not something that is going to happen immediately.”

Eurozone officials said no decision had been taken to wind up any Greek banks or initiate a bail-in of depositors, a process that would be started by the ECB declaring the banks insolvent or pulling emergency loans. Andrea Enria, chair of the European Banking Authority, said on Saturday he was not aware of any plans to introduce haircuts to retail depositors of Greek banks.

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About Sam Chaney

Sam Chaney holds a Bachelor of Science in Accounting and Bachelor of Arts in Economics from California State University, Fresno. He worked in the healthcare industry for 5 years as a financial analyst. Sam began his broadcast career on public access television at the Fresno Community Access Media Collaborative in October of 2012 with We Are Change Fresno TV. His shows include interviews with voices you will not hear on the mainstream corporate controlled media. He also broadcasts Weaponized News a talk radio show on 1680AM in Fresno, California with his partner Stuart Webb. Tune in Saturday night's from 6-8PM on 1680AM. He is an owner of the alternative news website WeaponizedNews.Com.

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