Greek Banks Abroad Shed Greek Bonds On Default Fears: Report

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Greek bank subsidiaries outside their home country have dumped Greek bonds in a bid to minimize the consequences of a potential shock to Greece's financial system, local media reports said. The central banks of Albania, Bulgaria, Cyprus, Romania, Serbia, Turkey and the Former Yugoslav Republic of Macedonia have all requested that Greek banks operating in those countries bring their exposure to Greece down to zero, Greek daily Kathimerini said. That includes shedding Treasury bills, bonds and deposits to Greek banks. "The plan to free these banks from any type of exposure to Greek banks or the Greek government has been completed," Kathimerini reported. The process of effectively quarantining Greece started after the country's general election in January and was deemed necessary because of the new government's aggressive, anti-austerity rhetoric, according to the paper. Since then, the situation has heated up, with concerns that Athens won't agree on a reform program with its international lenders. A failure to reach an agreement could leave Greece cash-strapped and essentially push it into debt default or an exit from the eurozone.

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