The media refuse to call this “bank run,” but that’s what it is.
Reuters reports, June 13, 2012, that Greek banks have seen “a marked increase in the pace of bank withdrawals” as a June 17 general election nears and fears grow that Greece could be forced out of the euro, senior bankers said.
Combined daily deposit outflows from the major Greek banks have reached 500-800 million euros ($631.65 million to $1.01 billion) over the past few days. Deposit outflows at smaller and medium sized banks were running at 10-30 million euros ($12.633 million to $37.9 million).
“deposit outflows” bank withdrawals include cash withdrawals, wire transfers and investments into money market funds, German Bunds, U.S. Treasuries and EIB (European Investment Bank) bonds.
Another unnamed Greek banker said the withdrawals were manageable and were matched by the Emergency Liquidity Assistance (ELA) program provided by the European Central Bank: “We have stable outflows on a daily basis, which are manageable and covered by the ELA facility.”
Fears that Greece may have to quit the single currency and return to a weak drachma have fueled a steady stream of withdrawals by companies and businesses alarmed at the prospect of seeing the value of their deposits cut sharply.
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 130 billion euro bailout deal or risk seeing funds cut off.
I wonder where all those “deposit outflows” go?