This would make it more difficult for banks to obtain liquidity, because at the moment they rely for that on government bonds which they use as collateral, both in the market and with the Eurosystem. So it would impair the ability of banks to provide credit, which would be detrimental to the Greek people in general.
But the government has been clear that it intends to honour its obligations to all its creditors, so I don’t want to speculate on other, more adverse scenarios. Is the Greek banking system adequately capitalised or will it need further recapitalisation? Is the “Cyprus model” of a bail-in an option?