The amazing thing about the Greek banking system since 2009 is not just the 25 to 30 per cent of deposits that have left, but the 70-75 per cent which have stayed. They have stayed through two years of Greece transparently getting closer to leaving the euro and turning these deposits into drachma. We’re being serious. It’s a real challenge to prospect theory. Up to €170bn remained in banks at the end of March.From the Financial Times, with a hat tip to Richard Fernandez for the pointer.
Although deposits clearly do respond to politics — the Greek President made that fairly clear this week — they have tracked the rate of Greece’s economic decline since 2009 pretty closely too. Maybe that says something about general pressure on Greek household wealth, as a driver of deposit flows. In any case, depositor flight has been what Gabriel Sterne, an economist at Exotix, has previously called a ‘bank jog’. Something to think about. What it becomes now with a month to go before fresh elections is another question.
Wednesday, May 16, 2012
Meanwhile in Athens
The flight (or non-flight) of money from Greek bank accounts continues to befuddle analysts.