Quarter of deposits withdrawn from Greek banks

Guardian
May 23, 2012

Almost 25% of deposits have been withdrawn from Greek banks in the last two years but outflows have been small from other banking systems inside the so-called periphery, according to Barclays analysts.

While Greek deposits are falling, those at Portuguese lenders have risen to record highs, and Spanish and Italian deposits have fallen 3% and 2% respectively.

"Talk of a possible exit of Greece from the European monetary union has sparked fears about deposit outflows from other peripheral countries, but these concerns are not new and evidence does not indicate material outflows from Spain, Italy, Ireland, and Portugal," the analysts said.

Even so, fears of a Greek exit from the eurozone have sparked debate about whether there should be an EU-wide guarantee for the single currency area. At the moment, the €100,000 deposit guarantees are paid for by national banking systems – which should prevent the need for any deposits to be withdrawn – but there are suggestions that the cost should be spread across the eurozone.

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