“ George Prokopakis
In English because I dont have a Greek keyboard!
1)Your first point is still unclear to me where you get the assertion that "Στις ερωταπαντήσεις όμως, ο ELA αναφέρεται ως "νέο χρέος" του δημοσίου, το οποίο εμφανίζεται με τη χρεοκοπία τράπεζας/τραπεζών"? Where are these Q&A that you are referring to? Your next statement "Όταν ο ELA γίνεται απαιτητός (με την ανακήρυξη τράπεζας ως μη φερέγγυας) γίνεται κρατική υποχρέωση, των φορολογουμένων δηλαδή." is at best a short cut ( implying that when banks are insolvent the home country of the banks will recapitalise them and this will happen by issuing new debt). I hope you will agree with me that with so many conditional clauses in your argument the readers of this publication deserve a bit more explanation and perspective rather than cheap grandstanding: XXX% OF GDP, XXX% of GDP I TELL YOU
2) Assets: The allocation of resources/costs between the central bank and the central government is a bureaucratic technicality that is irrelevant, and we of course agree on that: However it is you that is conveniently double counting when you "increase" the debt both by the ELA amount and the amount of the guarantees on the collateral: Lots of numbers, unclear reasoning but clear conclusions you draw. I call is bamboozle.
3) Target 2: Irredeemable liabilities are strange things: Is currency debt even if it is on the right hand side of the Central Bank balance sheet? Is Target 2 debt? Yes and no! Can we so easily say ( dare I say scream) that this liability is currently due? Of course not! Moreover, you are surely aware that these 125 BILLION of "debt" only cost 62,5 MILLION as ANNUAL interest expense for the BoG ( For the benefit of the readers of this publication, the Target 2 balances are remunerated at the MRO rate in the intra-Eurosystem accounts, i.e. 0.05% currently). I claim that your analysis of the Intra-Eurosystem items balances is highly misleading.
4) I still think that this is a good magazine, that Columbia is a great university and that scientists do not use phrases like "Το σενάριο Αλβανίας του Χότζα ή Β. Κορέας των Κιμ είναι το μόνο εφικτό.".
Cordially
AA
PS The problem of the Greek banks is rather more subtle I think: You present it as being a problem of Greek banks being funded by foreign sources. It is actually by and large a situation of Greek banks being funded by Greek sources ( depos and the BoG) and having lent to Greek borrowers ( that have largely defaulted on the Greek banks). The system is by and large "closed" in the sense that it is a political economy issue of allocating losses between Greek borrowers and savers. Additionally the Greek government is both a lender to the Greek banks (through the ELA) and an "investor" in the Greek banks (through its 100% ownership of the HFSF that itself partly owns the banks). Foreign liabilities of the Greek state ( in the form of the intra Eurosystem balances for the BoG and the EFSF bonds used to capitalise the HFSF) are counterintuitively tangential to the problem of the undercapitalisation of the Greek banks and the question of haircuts. Things are not as simple as you want to present them.
PS2: I see that your reply is timestamped 15:38. You were of course unaware at the time of the subsequent statement of the head of the European Banking Authority on the mater of haircuts on depos, explicitly referring to the protection of retail savers...Δυστυχώς!
http://www.eba.europa.eu/-/eba-chairman-dismisses-rumours-over-haircuts-to-greek-deposits ”
