19 May 2015
Expectations of a Greek deal limited this week - ANZ
FXStreet (Bali) - In view of ANZ's Research Team, expectations of a potential deal between Greece and its international creditors are limited at this week’s EU Summit in Riga.
Key Quotes
"Greek 10 year bond yields surged 55bps to just under 11% on growing fears for the nation’s financial system."
"Progress in the ongoing debt negotiations is reported to be better, but slow, with significant differences remaining. Expectations are limited that an agreement can be reached at this week’s EU Summit in Riga."
"Deposit outflows are continuing, with the IMF estimating that 20% of total deposits (EUR40bn) have left the banking system since last December. Concern is also growing that banks are running out of collateral to support a continuous rise in emergency liquidity assistance (ELA) from the ECB, which may or may not be forthcoming."
"Outstanding ELA currently amounts to EUR80bn and some private estimates suggest that eligible banks’ collateral won’t stretch past around EUR95bn. The next loan repayment of EUR309m to the IMF is due on 5 June and Athens urgently needs to reach an accord with its creditors if it is to be able to make its repayments."
Key Quotes
"Greek 10 year bond yields surged 55bps to just under 11% on growing fears for the nation’s financial system."
"Progress in the ongoing debt negotiations is reported to be better, but slow, with significant differences remaining. Expectations are limited that an agreement can be reached at this week’s EU Summit in Riga."
"Deposit outflows are continuing, with the IMF estimating that 20% of total deposits (EUR40bn) have left the banking system since last December. Concern is also growing that banks are running out of collateral to support a continuous rise in emergency liquidity assistance (ELA) from the ECB, which may or may not be forthcoming."
"Outstanding ELA currently amounts to EUR80bn and some private estimates suggest that eligible banks’ collateral won’t stretch past around EUR95bn. The next loan repayment of EUR309m to the IMF is due on 5 June and Athens urgently needs to reach an accord with its creditors if it is to be able to make its repayments."