“The downgrades to ‘SD’ follow the measures introduced by the Greek government on Monday June 29. Specifically, these include limits to deposit withdrawals, the closure of bank branches for a full working week, and the prohibition of money transfers out of Greece unless authorized by the Greek Ministry of Finance. The rating actions reflect our opinion that private individuals’ lack of access to their deposits on a timely and in-full basis, and the constraints to their ability to transfer funds, constitute a selective default under our criteria. Our downgrade of all outstanding senior unsecured notes to ‘CCC-‘ reflects our opinion that it is now inevitable that Greek banks will default within six months in the absence of support from the EU authorities; we do not anticipate such support will be forthcoming,” said S&P.
Greece’s implementation of capital controls, including a 60-euro withdrawal limit from the country’s banks, are catching the eyes of other entities as well. For example, index provider MSCI (NYSE: MSCI) said Monday it is considering expelling Greece from the MSCI Emerging Markets Index and applying the ominous standalone market classification on the country. [MSCI Could Demote Greece]
The last country MSCI demoted to standalone status was Venezuela in May 2006. If Greece earns that dubious market classification, it would join the likes of Botswana, Ghana, Jamaica and Zimbabwe in standalone territory, according to MSCI.
Global X FTSE Greece 20 ETF