Greeks Withdraw Nearly $1 Billion From Local Banks As Attempts To Form A Coalition Government Fail – Athens Composite Index At New 22-Year Low

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Stocks Post Loss on Greece, S&P at 3-Month Low (CNBC, May 15, 2012):

Earlier, Greek politicians failed to form a coalition government during their final talks, pushing the Athens Composite Index to a new 22-year low. A caretaker government is likely to be formed pending a new election next month. The euro fell below $1.28 following the announcement and European closed at new 2012 lows.

Greeks Withdraw Nearly $1 Billion From Local Banks (CNBC, May 15, 2012):

Greek depositors withdrew 700 million euros ($900 million) from the nation’s local banks recently, said President Karolos Papoulias, though the exact timing of the transfer was unclear.

Citing a conversation he had with Greek Central Bank Governor George Provopoulos, Papoulias said “that the strength of banks is very weak right now.”

Stocks declined following the report after being up earlier in the day.

Attempts to form a government in Greece collapsed on Tuesday, jolting financial markets at the prospect that leftists opposed to the terms of an EU bailout could sweep to victory in a June election and nudge the euro zone crisis into a dangerous new phase

The tremors from Greece, compounding worries about Spain’s debt-laden banking system, ended any honeymoon for new French President Francois Hollande, thrusting the growing risks to the euro zone to the top of the agenda for his first meeting with German Chancellor Angela Merkel hours after he took office.

“I think people need to prepare for the eventual removal of Greece from the EU and investors are getting ahead of that before they’re forced to,” said Matthew McCormick, vice president and portfolio manager at Bahl & Gaynor Investment Counsel on CNBC’s “Closing Bell.” “It’s a political market and an event-driven market.”

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