Thursday, April 8, 2010

Greek Banks Now Seek Government Aid Due to Capital Flight; Investors Lose 8% in One Week

The Euro is weakening further after reports that Greek banks are now seeking government aid.

Greece's four largest banks are seeking support from the government to help stem the decrease in liquidity after a "significant" flight of deposits in the first two months of the year, as we reported yesterday.

According to the finance minister of Greece, the banks have asked for access to resources remaining from the E28B package due to international crisis in 2008. The Financila Times reports that the banks actions raise more concerns about the impact that the debt crisis of the country has on the financial sector.

In another report, the Financial Times reports that those who invested in securities issued by Greece on the 29th (which totaled 5B Euros) lost 8% of the application in just one week.

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