ATHENS (Reuters) - The head of the Bank of Greece warned bankers last week to brace for a “difficult day” on Tuesday if the Athens government does not reach a deal with creditors at an emergency euro zone summit on Monday, two senior bankers told Reuters.
Bank of Greece Governor Yannis Stournaras called a special meeting with top bankers on Friday to discuss the mounting crisis in the banking sector after a flood of withdrawals that passed a billion euros a day toward the end of the week.
They said Stournaras did not talk about capital controls being imposed on Greek banks, which rely on European Central Bank support to keep operating, but he made it clear that the situation would be serious.
“If there is no deal, Tuesday will be a difficult day and decisions will have to be taken, is what we were told,” one of the bankers, who were both present at the meeting, said. “If there is no deal, the Europeans will have decided to move on is what we were told.”
He said the meeting also addressed how the banks could keep a supply of cash open to customers.
“We discussed technical issues relating to ATM machines. Feeding them with cash is a big logistical problem,” he said.
A Bank of Greece spokesman confirmed that the meeting took place but refused to comment on what was discussed.
The ECB last week raised the cap on the so-called emergency liquidity assistance which the Bank of Greece can provide to the banks by around 1.8 billion euros but that may not be sufficient to keep the system running for more than a few days.
The ECB’s board is expected to discuss the liquidity of the Greek banking sector at 0830 GMT (4:30 a.m. ET) on Monday.
“Things are difficult,” the other banker said. “If there is no deal on Monday, God knows what Tuesday will look like. Even the ECB is not sure on the roadmap thereafter,” he said.
According to sources in Frankfurt and Brussels, pre-orders for deposit withdrawals for Monday have already reached 1 billion euros. Customers who want to withdraw large sums from their accounts usually have to file pre-orders to ensure that banks have enough cash on hand to meet their request.
Withdrawals from Greek banks totaled some 4.2 billion euros last week as worries mounted that the months-long standoff between Athens and international creditors could end in Greece defaulting on its debt and being pushed out of the euro zone.
Writing by James Mackenzie; Editing by Alison Williams