Bank Chief Denies Raid Plan

National Bank of Greece Chairwoman Louka Katseli

ATHENS – A top Greek bank official has denied a report in The Financial Times there are plans to confiscate 30 percent of accounts over 30,000 euros in the midst of a growing financial crisis.

Louka Katseli, who also chairs the National Bank of Greece, told Skai TV that suggestions that authorities were planning a raid on deposits belonged “only in the sphere of fantasy.”

“There are no such scenarios at any Greek bank, not even as an exercise on paper,” said Katseli, a former PASOK lawmaker who authored a law to give indebted Greeks relief from what they owe.

The newspaper said that Greek banks were preparing contingency plans for a possible “haircut” on deposits amid fears of financial collapse but Katseli said that was  “completely baseless.”

The report came two days ahead of a referendum in which Greeks will accept or reject the tough terms of an aid deal with international creditors which could decide whether the country is pushed out of the Eurozone.

Greek leaders have repeatedly dismissed the possibility they will have to “bail-in” depositors to prevent the collapse of the banking system but they also said there wouldn’t be a referendum, bank closures or capital controls, all of which they implemented.

Citing banker and business people who said they knew of a haircut scheme, the Financial Times reported: “The plans, which call for a ‘haircut’ of at least 30 percent on deposits above 8,000 euros, sketch out an increasingly likely scenario for at least one bank.”

The report quoted a source as saying: “It (the haircut) would take place in the context of an overall restructuring of the bank sector once Greece is back in a bailout program.”

The plan would mirror that on Cyprus two years ago in which 47.5 percent of accounts over 100,000 euros were seized to pay for the mistakes of bankers who were never held accountable, nearly wiping out the life savings of many people.

If the Greek plan were imposed it would be an unprecedented raid on the accounts of small depositors who would have to pay for years of government mismanagement that led to the need for bailouts.