Wednesday, May 20, 2015

Greek Capital Controls Likely Says Moody’s

There is a “high likelihood” of capital controls being introduced in Greece, according to a report published by Moody’s on Wednesday, starting with a deposit freeze at Greek banks.

Moody’s Investor Service downgraded its outlook for the Greek banking system to negative from stable, which it said reflected: “the significant deterioration in banks’ funding and liquidity since December 2014, with deposit outflows estimated at more than 30 billion euros ($33.3 billion), or 18 percent of total deposits, over the past five months.”

These pressures are unlikely to ease over the next 12-18 months, Moody’s said, “and there is a high likelihood that capital controls and a deposit freeze will be imposed.”

The credit ratings agency said the negative outlook also took into account the downward revision of Moody’s 2015-16 GDP (gross domestic product) forecasts for the country, owing to political developments since the elections a few months ago which have led to a standstill in economic activity.

via CNBC

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