Greek
Bank Run Update: €100-€500 Million Per Day
Considering that the
Greece banking system has about €170 billion in total deposits,
this is roughly 0.3% of the entire deposit base fleeing each day -
those who understand the nuances of fractional reserve banking get
why this could be an issue.
Putting this in the US context, which has over $8 trillion in various forms of deposits, this would be equivalents to about $25 billion getting withdrawn. Every day
Bankers said up to 800
million euros ($1 billion) were leaving major banks daily and
retailers said some of the money was being used to buy pasta and
canned goods, as fears of returning to the drachma were fanned by
rumors that a radical leftist leader may win the election.
12
June, 2012
Five
days ahead of the Greek parliamentary re-vote, the media propaganda
machine has gone mute due to the moratorium on the RAND() known as
popular polling: forgotten are the days when Syriza' popularity
rating would swing from -100 to +100 in the span of hours, Diebold
notwithstanding. Which leaves the media machine just one tactic:
updates on the economic collapse as a tacit suggestion of what may
happen if situation is not fixed. And while at this point it is
nearly impossible to distinguish propaganda from fact, the latest
numbers out of Kathimerini are just stunning. As Bloomberg's Marcus
Bensasson reports, citing Kathimerini, the Greek banking system has
continued to hemorrhage deposits this month, amid uncertainty over
the outcome of elections on June 17. "Many people are putting
money in shares of mutual funds denominated in dollars because of the
bureaucratic difficulty of taking money out of Greece, or are keeping
cash at home, the newspaper said."
How much? "Deposits
are leaving the banking system at a rate of 100 million to 500
million euros ($125 million to $625 million) a day, Kathimerini said,
without specifying over how long a period that rate of outflow has
continued."
Putting this in the US context, which has over $8 trillion in various forms of deposits, this would be equivalents to about $25 billion getting withdrawn. Every day
Greeks
Withdraw $1 Billion a Day Ahead of Vote
Greeks
pulled their cash out of the banks and stocked up with food ahead of
a cliffhanger election on Sunday that many fear will result in the
country being forced out of the euro.
CNBC,
13
June, 2012
The
last published opinion polls showed the conservative New
Democracy party,
which backs the 130 billion euro ($160 billion) bailout that is
keeping Greece afloat, running neck and neck with the
leftist Syriza party,
which wants to cancel the rescue deal.
As
the election approaches, publishing polls is now legally banned and
in the ensuing information vacuum, party officials have been leaking
contradictory "secret polls".
"This
is nonsense," one reputable Greek pollster said on condition of
anonymity. "Our polls show the picture has not changed much
since the last polls were published. Parties may be leaking these
numbers on purpose to boost their standing."
The
pollster said there was some consolidation, with voters turning to
New Democracy and Syriza from smaller parties but the pool of
undecided voters remained unusually large so close to the election
and the result was impossible to predict.
Both
parties say they want Greece to remain in the single currency but
Syriza has pledged to scrap the bailout agreement signed in March
which has imposed some of the toughest austerity measures seen in
Europe in decades.
The
European Union and International
Monetary Fund have
warned that Greece, which has only enough cash to last for a few
weeks, must stick to the conditions of the bailout deal or risk
seeing funds cut off.
New
Democracy has been telling voters they must choose between the euro
or the drachma, while Syriza promises to end the austerity measures
imposed by Greece's international lenders, such as salary and pension
cuts, that have driven many Greeks into abject poverty.
Fears
that Greece
will collapse financiallyand
leave the euro have slowly drained Greek banks over the last two
years. Central bank figures show that deposits shrank by about 17
percent, or 35.4 billion euros ($44.4 billion) in 2011 and stood
165.9 billion euros ($208.1 billion) at end-April.
Bankers
said the pace was picking up ahead of the vote, with combined daily
deposit outflows from the major banks at 500-800 million euros ($625
million to $1 billion) over the past few days, and 10-30 million
euros ($12-36 million) at smaller banks.
"This
includes cash withdrawals, wire transfers and investments into money
market funds, German Bonds, U.S. Treasuries and EIB bonds," said
one banker, who spoke on condition of anonymity.
Retailers
said consumers were stocking up on non-perishable food while almost
all other goods were seeing a huge drop in sales as cash-strapped
Greeks have no money to spare in the country's fifth year of
recession.
"People
are terrified by the prospect of returning to the drachma and some
believe it's good to fill their cupboard with food products,"
said Vassilis Korkidis, head of the ESEE
retail federation.
"It's
over the top, we must not panic. Filling the cupboard with food
doesn't mean we will escape the crisis," he said.
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