This week we saw why the agreement on Greece was so difficult to negotiate. Questions surrounding the implementation of the loans precipitated political crises not just in Athens, but also in Berlin and even reaching London. In spite of a wide range of objections, the process is still moving forward, and banks in Greece may reopen on Monday. Capital controls will remain in place for quite some time to come, probably longer than a year, with only gradual loosening as time goes on.
Banks in Greece lost more than half of their deposits since the beginning of the year. However, they are still solvent according to the rules of banking, and the ECB says that the risks faced by the banks are essentially political in nature.
The experience of Greek consumers and businesses getting by without banking this month could be a valuable reference point for others elsewhere in the situation of a future banking system breakdown.
A credit union was liquidated yesterday by NCUA. Lakeside Federal Credit Union of Hammond, Indiana had 2,000 members. Member accounts and loans were transferred today to Teachers Credit Union.
