Greek Capital Controls Likely Says Moody’s

May 20, 2015 Share Print 0

There is a “high likelihood” of capital controls being introduced in Greece, according to a report published by Moody’s on Wednesday, starting with a deposit freeze at Greek banks.

Moody’s Investor Service downgraded its outlook for the Greek banking system to negative from stable, which it said reflected: “the significant deterioration in banks’ funding and liquidity since December 2014, with deposit outflows estimated at more than 30 billion euros ($33.3 billion), or 18 percent of total deposits, over the past five months.”

These pressures are unlikely to ease over the next 12-18 months, Moody’s said, “and there is a high likelihood that capital controls and a deposit freeze will be imposed.”

The credit ratings agency said the negative outlook also took into account the downward revision of Moody’s 2015-16 GDP (gross domestic product) forecasts for the country, owing to political developments since the elections a few months ago which have led to a standstill in economic activity.

via CNBC

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.