What are the Greek banks using as collateral to get this
carried forward tax allowances.
I am not shitting you! 🙂
Almost half the “capital” in the four largest Greek banks really consists of “deferred tax assets” or discounts on future tax bills. When banks make no profit, they won’t enjoy such discounts.
Moody’s has estimated that at the end of April, 32% of total assets of Greek banks were derived from central bank funding. This was 12% in September and estimates put it at close to 50% today., with bank deposits at their lowest level in 11 years, below 130 billion euro. As Greeks withdraw deposits from their banks, using the money to buy hard assets like cars, whose sales have risen, the ECB still makes sure Greek banks enjoy sufficient liquidity, by allowing the Greek central bank to create euros itself through the system of “emergency liquidity assistance” (ELA), which should only be allowed to prop up solvent banks
Actually, I expect ELA has no collateral at all behind it….
http://www.zerohedge.com/news/2015-06-26/what-would-happen-case-grexit