Following Greece's resounding "no" vote in Sunday's referendum, global banks have upped their stakes on the debt-mired nation quitting the euro zone, with a "Grexit" now viewed by many as more likely than not.
Analysts and economists from banks including JPMorgan, Barclays, Unicredit and Societe Generale have upped their forecasts on the likelihood of a Grexit, making it their base-case scenario. The severely weakened banking system is the main concern, with some suggesting a referendum of the Greek people on the country's membership of the euro zone could be the next step in the warring between Greece and its international creditors.
"Our base case is that the pressures coming from a dysfunctional banking system in Greece will shorten the time horizon to negotiate a deal to a handful of weeks," said JP Morgan analyst, Malcolm Barr, in a research note on Monday.
"As that pressure builds, there is likely to be a temptation to call a referendum in Greece on euro membership, and for the state to begin issuing IOUs or similar and giving these some status as legal tender. This is a path that suggests to us that there is now a high likelihood of Greek exit from the euro and possibly under chaotic circumstances."