All the Greek Banks including E F G EUROBANK ERGAS (OTCMKTS:EGFEY) are down after significant improvement in deposit withdrawals. The issue has forced major lenders to seek help of central bank for immediate financial aid.
Greece-Euro Area Creditors Talks Failure:
As per the reports of Bloomberg, the situation became worse after talks between Greece and its creditors based in Europe a few days ago ended badly. Greece was seeking an additional bail-out, but things didn’t turn out as per expectations. As soon as the news became public, all the major banks faced huge deposit withdrawals; a situation they were not ready for.
All the investors appear to be in some kind of race to exit their funds. The collective approach of the investors across the country caused shares of all the listed banks to fall significantly. The National Bank of Greece fell by 9.32% while E F G EUROBANK ERGAS (OTCMKTS:EGFEY) fell 12.7% after the news of talks between Greece, and its Euro Creditors was made public. Some of the other major banks that faced similar situation were Piraeus Bank (12.7%) and Alpha Bank (12.7%).
After this sudden plunge in the banking sector, Greece was forced to seek a new deal before its existing bailout plans expired. The Eurozone finance minister urged it to think about an extended bailout deal, with the top money man of Germany. They stated that the future of Greece would entirely depend upon the talks with the government in Athens.
Recently, Thomas Harjes and Barclays economists Antonio Garcia Pascual stated that all the funds to Greek will be stopped if it doesn’t accept the offer from finance ministers. As per the reports, if all the major banks of Greece including E F G EUROBANK ERGAS (OTCMKTS:EGFEY) want to get ELA from European Central Bank, then they will need an extension. It can only be granted if the government of Greece breaks the ice with Germany.