Something else is certain: Banks in Greece won’t open Monday, and even if confidence is quickly restored, they are unlikely to open for some weeks. Capital controls preventing the movement of funds out of Greece are likely to be in place even longer.
In Cyprus, where there was a relatively rapid bailout resolution in 2013, banks were closed for 12 days.
Carmen Reinhart, professor of international finance at Harvard University’s Kennedy School of Government, said the best recent parallels to Greece are two other examples where national central banks couldn’t manufacture currency: Argentina in 2001 and Panama in 1989. Banks closed in Panama and remained under tight withdrawal limits for nine weeks, while restrictions on withdrawals in Argentina lasted for a year.
“Bank holidays, like capital controls, are often introduced as very temporary, but, as the reality sinks in and confidence isn’t restored immediately, they tend to linger,” she said. #greece #grexit #eurozone