Benny Peiser18.12.2011 16:38
Recent figures from Greece show an accelerating withdrawal of money from domestic banks; deposits are down 25 percent since September 2009, climaxing in a massive move in September and October as the prospects for a Greek exit from the euro increased. Much of the money movement reflects well founded fears that a Greek withdrawal from the euro would mean that deposits in Greek banks would be forcibly converted from euros into drachmas — and nobody wants that. The wonder is that anybody is keeping any money at all in Greek banks. There is no good reason why an individual or company would want to put their assets in one of the dodgiest countries around where the banks are under threat, the government is desperate and an unstoppable financial crisis could break out at any moment. Unfortunately, rational behavior by individual Greek citizens could wreck what is left of the economy. A banking crisis in Greece would destroy what is left of the country’s finances. Recently I wrote about a “bank walk” as European and other investors move their assets into safer countries and safer banks. This is beginning to look a little more like a “bank jog”; banks runs, when they come, come suddenly. The conditions are increasingly favorable for bank runs in Europe; this financial crisis could turn very ugly very fast.
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