Greece is the word that you heard this weekend.
As they lineup to empty their bank accounts, the Greeks have taken over 2 billion euro out of the Greek banking system this week.
Greek banks have tapped more than 3 billion euro in emergency lending facilities from the European Central Bank in order to avert bank runs this week. Come Monday EU and IMF officials cannot assure the public that the banks will open.
A Monday meeting between Greek financial ministers and IMF and EU officials will more than likely result in no resolution and the planning of others meetings in the days ahead of a June 30th repayment deadline.
Lenders are asking for Greece to make a 1.6 billion euro payment at the end of the month. There is no chance that payment will be met, but at the same time like other deadlines, it will be violated without triggering a credit event.
While each lender and majority of banking institutions state that they are insulated by a Greek default, this cannot possible be true.
The systemic nature of the global financial infrastructure says that many parties will be left without a chair once the music stops. It’s just that no one knows at this time who or what will be left holding the bag.
I would even get into whether Italian, Spanish or Portuguese financial ministers would do should Greece repudiate the debt and exit the EU, since that is perhaps an event that happens in the fall.
Suffice it to say this is a drama that still has many acts to play out before the dénouement occurs.