Tuesday, April 6, 2010

Greeks Greatly Withdrawing Money From Greek Banks, Terrible for Banks

In another terrible sign for Greece and Euro, the U.K.'s Telegraph reports that Greeks are withdrawing their money from Greek banks. Whether this becomes a run on the banks remains to be seen, however, it certainly reduces the ability of Greek banks to lend as they cannot borrow anywhere else.

"Wealthy Greeks and companies have been clamouring to move their cash deposits to banks such as HSBC or France's Société Générale, which operate large branches in the country. They are among those to have received several billion euros of new money in recent weeks.
HSBC's private banking in the country is understood to have been flooded with business, while the local operations of several other major international banks have already seen large inflows of money".

While we reported in the Canadian dollar freshly hitting parity today, the Euro continues to do the opposite and drop:

The article reports that over €3B of deposits held by Greek households and companies left the country in February, after the 5B in January, according to the latest figures available from the Bank of Greece.

Where the money is going to: Switzerland, the UK and Cyprus. The wealthiest Greeks are moving their deposits to Swiss banks.

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