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Remember the “Corralito”? Lessons on Greece and Argentina from the New York Times

This is from the New York Times today:

Greece will keep its banks closed on Monday and place restrictions on the withdrawal and transfer of money, Prime Minister Alexis Tsipras said in a televised address on Sunday night, as Athens tries to avert a financial collapse.

The government’s decision to close banks temporarily and impose other so-called capital controls — and to keep the stock market closed on Monday — came hours after the European Central Bank said it would not expand an emergency loan program that has been propping up Greek banks in recent weeks while the government was trying to reach a new debt deal with international creditors.

The debt negotiations broke down over the weekend after Mr. Tsipras said he would let the Greek people decide whether to accept the creditors’ latest offer. That referendum vote is to be held next Sunday, after the current bailout program will have expired.

And this is from the New York Times on December 2 2001:

The government (of Argentina) has limited cash withdrawals from banks and taken a step toward adopting the dollar as Argentina’s currency, as part of a desperate effort to avert a run on banks and a chaotic devaluation.

The measures, announced late Saturday, were another sign that Argentina is on the brink of a default on its $132 billion in public sector debt. It has already cut the interest payments it makes on $45 billion in bonds in recent days.

A month later we had street rioting, banking sector collapse, a sovereign default and a major devaluation – not to mention the collapse of government and a very busy rotating door at the presidential palace!

Will Greece be luckier in the coming month? Let’s hope so.

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If you want to hear me speak about these topics or other related topics don’t hesitate to contact my speaker agency Specialist Speakers – e-mail: daniel@specialistspeakers.com or roz@specialistspeakers.com.

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