Troika discussed depositor bail-in for two Greek banks in 2011

The troika discussed with Greece in 2011 the possibility of bailing in depositors at two failing banks in a similar scheme to the one adopted for Cyprus.

Sunday’s Kathimerini discovered that a haircut for depositors at Aspis and Proton banks was discussed in the spring of 2011 as part of talks between Greece, the European Commission, the European Central Bank and the International Monetary Fund ahead of the Greek debt restructuring program, or PSI.

Greece’s lenders deemed at the time that Aspis and Proton were not systemic lenders and as such a haircut on depositors would not impact the rest of the country’s banking system.

The Greek side argued that the systemic banks would already be losing part of their capital as a result of a restructuring of Greek bonds and that the knock-on effect of deposit losses at Aspis and Proton might be too much for lenders to bear.

This led to the plan for a haircut on deposits in Greece being abandoned.

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