BVerfG and the ECB’s OMT programme

Today 21 June 2016 the BVerfG has affirmed the legality of Mario Draghi’s OMT programme. In doing so, it followed the lead of the CJEU. Nothing remarkable here, but two important issues arise: the BVerfG had initially insisted on a ban on debt restructures (no pari passu treatment of ECB held bonds in case of a sovereign

Grexit Daily News – 11 July 2015

11 July 2015  — Bring on the Lawyers Steve Peers published in his EU Law Analysis Blog a piece on legal challenges to ECB restrictions on Greek bank accounts (see here). Many EU citizens have watched with sympathy and concern as Greek citizens have been limited to withdrawing €60 a day in the last two weeks. This

Grexit Daily News – 9 July 2015

9 July 2015  —  Decoupling the Banks from the Greek Government The reason why finding an exit from the Greek quagmire is so difficult is the strong link between the Greek banking system and the sovereign. I have explained elsewhere in this blog (see here) how the Greek government has been syphoning liquidity off the Eurosystem in

Strange things going on at Pireaus Bank

I spoke with Tom Beardsworth of Bloomberg on Monday about the refinancing actions of Pireaus Bank. He reported the following (see here for original) Piraeus Bank SA rolled over 4.5 billion euros ($4.9 billion) of bonds issued to itself and used as collateral for emergency loans from the Bank of Greece as the nation’s lenders struggle to

Grexit Daily News – 30 June 2015

30 June 2015  —  We vote YES to Europe, No to Tsipras’ fake Greferendum Unfortunately, today will go down in history as the day when Greece’s long winded car-crash met with the wall. Greece failed to pay the IMF, was downgraded to Default status by the credit rating agencies and begun the process of cascading

Grexit Daily News – 26 June 2015

26 June 2015  — What happens next week if no deal is reached? While negotiations are dragging on, people keep asking what will the day after look like? What happens if no deal is reached on Saturday and we wake up on Monday with the stalemate continuing? On the assumption that no deal is reached,

The role of the ECB in restricting funding avenues to Greece – will Target2 be next?

Read my post on the role of the ECB in the Greek crisis on the EU Law Blog of Prof. Steve Peers

Will Grexit bring down Target2 ?

Explaining ELA and the Consequences of Grexit on Target2 By Frances Coppola from her blog ELA works like this. Central banks will lend reserves to banks against a range of collateral, subject to haircuts and conditions. In the Eurosystem, provision of “emergency liquidity assistance” (ELA) is the responsibility of national central banks, though it requires ECB approval. 

Επιστροφή στο γύψο: Greek Capital Controls

What Would Greek Capital Controls Look Like? What is the Greek endgame going to look like? The following from Bloomberg looks at capital controls. Without a bailout deal sometime soon, Greece could face years of restrictions on what its citizens do with their money. by Nikos Chrysoloras, June 1, 2015 The four-month standoff between Greece and

Why Greece cannot be allowed to default

From: Euro-sclerosis By Alasdair Macleod Lets assume for a moment that Greece defaults. In that case the Greek banking system would certainly collapse (assuming the ECB suspends its emergency liquidity assistance (ELA) because bad debts already on their balance sheets exceed tangible equity by a substantial margin. If that assistance is withdrawn, some €80bn of ELA will