Tags: GREECE | PORTUGAL | PIGS | PIIGS | SOVEREIGN DEBT | CRISIS | BONDS

Report: Panicky Investors Pull Cash Out of Greek Banks

Tuesday, 06 Apr 2010 11:21 AM

Greek banks are being hit by a wave of redemptions as rich citizens and companies look to move their money to big global banks or offshore as the country's debt crisis rages, the Telegraph newspaper reported on its Web site.

The report appeared to contradict recent data from the European Central Bank and comments to Reuters by analysts and Greek banking sources, who said there was no clear evidence of a major, extended deposit outflow from Greek banks.

The U.K. newspaper said late on Monday that big depositors have been clamoring to move their cash to international financial firms such as HSBC or France's Societe Generale, which operate large branches in the country.

They are among those to have received several billion euros of new money, it said without specifying sources.

HSBC's private banking in the country was understood to have been flooded with business, while the local operations of several other major international banks have already seen large inflows of money.

A spokesman for HSBC declined to comment, the newspaper said.

More than 3 billion euros ($4.05 billion) of deposits held by Greek households and companies left the country in February, while in January about 5 billion euros of deposits were moved out, the Telegraph quoted figures from Bank of Greece as showing.

Switzerland, the United Kingdom and Cyprus have been the largest recipients of the money, with the wealthiest Greeks looking to move their deposits to Swiss banks accounts to escape the more punitive tax measures many fear will be introduced in the wake of the country's economic crisis, the newspaper said.

However, latest ECB data showed no clear trend for deposit flows out of Greek banks.

Deposits at monetary financial institutions in Greece, denominated in all currencies and excluding the Eurosystem reporting sector, rose to 362.3 billion euros in February, the highest level since records began in March 1998, from 353.1 billion euros in January, the data showed.

Large monthly fluctuations in deposits are common; deposits fell by nearly 10 billion euros between June and July last year.

Commercial bankers and analysts told Reuters in February that while there was speculation in markets and wealth management circles about capital flows from Greece, they had not seen a big, extended outflow on a net basis.

Concern about the banking system's health or the risk of Greece leaving the euro did not seem serious enough to prompt such an outflow, they said.

National data for Greek commercial bank deposits in February was not yet available on Bank of Greece's website on Tuesday.

Greek bank stocks were down 1.9 percent on Tuesday morning, having dropped 15.4 percent so far this year.

That compared to a 0.4 percent rise for European bank stocks in general on Tuesday, and a 2.9 percent gain so far in 2010.

© 2017 Thomson/Reuters. All rights reserved.

 
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Greek banks are being hit by a wave of redemptions as rich citizens and companies look to move their money to big global banks or offshore as the country's debt crisis rages, the Telegraph newspaper reported on its Web site. The report appeared to contradict recent data...
GREECE,PORTUGAL,PIGS,PIIGS,SOVEREIGN DEBT,CRISIS,BONDS
465
2010-21-06
Tuesday, 06 Apr 2010 11:21 AM
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