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As fears of a Greek exit from the Euro zone grow, investors across the country withdrew hundreds of millions of Euros from Greek banks on Monday and Tuesday. As thousands of customers closed accounts, or transferred to euro-friendly banks in neighboring countries like Cyrus, analysts began to fear that a “bank run” was on the horizon. Bank runs take place when large groups of customers withdraw their holdings from banking institutions, fearing that the bank will soon be insolvent. As more people withdraw from the bank, the likelihood of insolvency increases, further increasing the number of customers who withdraw. Essentially, closure transforms from a possibility to self-fulfilling prophecy.
» Attempting to calm “bank run” fears: President Karolos Papoulias announced the staggering total during a speech before heads of Greece’s Panhellenic Socialist party. Papoulias admitted that analysts estimated similarly high withdrawals on Tuesday, but assured party members that there was no need to fear a “bank run”. Analysts seem to agree for now, with Mediobanca analyst Alex Tsirigotis telling Reuters, “We have witnessed periods of tension before when the banks experienced large outflows. In my view, the majority of people with these concerns would have done so by now.” (Photo via dullhunk)
…we will most likely bail out Europe, which will be a real tragedy.Ron Paul, making clear his bleak long-term assessment of the euro zone debt crisis.
Despite earlier reports to the contrary, Greek PM George Papandreou won’t be offering up his resignation, Greek officials say. This isn’t a confusing morning at all!
We must make it very clear to people that the current problem, namely of excessive debt built up over decades, cannot be solved in one blow, with things like euro bonds or debt restructurings that will suddenly make everything okay. No, this will be a long, hard path, but one that is right for the future of Europe.German Chancellor Angela Merkel • Arguing, amidst much jeering from leftist opposition parties, that Europe needs to change the way it approaches its growing debt crisis. Merkel argues for long-term fundamental change. “I’m convinced that this crisis, if a great crisis of the western world is to be avoided,” she said, “cannot be fought with a ‘carry on’ attitude. We need a fundamental rethink.” Merkel is facing a parliamentary vote later this month that could prove a great threat to her power, and her party is sinking in the polls right now. She suffered a setback earlier in the day after a court put strict limitations requiring her to get approval from lawmakers to grant future bailout aid to other European countries. source (via • follow)
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