The Greek "Bank Jog" Is Back: Bank Deposits Tumble To Lowest Since 2001

Tyler Durden's picture

It didn't take much for the Greek bank run jog to return: with Greece once again stuck between an IMF rock and a Schauble hard case, and whispers that another bailout may be on the horizon, the local population took advantage of whatever capital controls loopholes they could find, and withdrew money from the local banking sector, which to this day remains on ECB life support, almost two years after the 3rd Greek bailout in the summer of 2015.

According to Greece central bank data, Greek private sector bank deposits declined in January for the second month in a row, driven by renewed concerns over the country's neverending bailout. Business and household deposits fell by €1.63 billion, or 1.34% month-on-month to €119.75 billion ($126.8 billion), the lowest level since November 2001. The January outflow follows a "jog" of €3.4 billion in December, making the two-month drop the worst since the latest Greek bailout panic in July of 2015.

And as concerns about the Greek fate only grew in February, it is likely that the next month's data will show another acceleration in outflows, especially since Greek non-performing loans remain at a staggering 70% of total bank assets and continue to grow.

As Reuters further notes, starting in December, the Bank of Greece stopped counting deposits of 4.2 billion euros held in the Loans & Consignment Fund and another 2.1 billion euros in the Deposit Guarantee Fund (TEKE) as private sector deposits. The move followed a reclassification by the country's statistics service ELSTAT, which groups the two institutions under the general government sector.

The latest two months of outflows put an end to a period of relative stability during which Greek banks had seen small deposit inflows in more than a year after the country clinched a third bailout to stay in the euro zone. Local banks, for the most part insolvent, remain dependent on central bank borrowing to plug their funding gaps. The gap between outstanding loans and deposits has forced banks to rely on borrowing from the European Central Bank and the Bank of Greece to plug their funding holes.

Greece's banking sector saw a 42 billion euro deposit outflow from December 2015 to July last year. Capital controls imposed on June 2015 helped contain the flight but sharply increased banks' dependence on emergency liquidity assistance (ELA) from the Bank of Greece.

Prior to the latest outflows, to signal confidence in the banking system the government has eased capital restrictions after making headway on
bailout-mandated reforms and improved confidence in the banking system. Following the latest deposit outflow data, that may soon change.

As part of the relaxation of controls, "mattress" cash that are returned to banks are not subject to the restrictions, meaning amounts deposited can be fully withdrawn. That is, of course, assuming the upcoming showdown between the members of the Troika ends amicably. Should the outflows persist as this rate, Greece will be back on the front pages, and demanding a 4th bailout by mid-Spring, and certainly ahead of the looming July 2017 debt maturities.

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auricle's picture

Leave only what you need to pay the bills.

LetThemEatRand's picture

What did they expect when they've already telegraphed to depositers that their money belongs to the bank when push comes to shove?

Philo Beddoe's picture

They expected people to be stupid. Usually a safe bet. The house does lose every so often. 

jus_lite_reading's picture

Nothing to see here folks! The EU slave masters will simply print some more fiat to keep the illusion of continuity going, thus keeping the slaves on the plantation...

After all, we can't have Greece leave the EU before election time

Jaspergers's picture

Well that and the fact that we all recently received the same phone call we got right before the capital controls. Let's see what happens this time.

By this time next year Greece will have another Mitsotakis running the circus. Because democracy and stuff.

Ps-- #ProTip If you want to get sucked off by a Greek bank branch manager in front of a dozen terrified geezers waiting in line simply deposit any amount over 10k. You may even get to keep the 10k.

OverTheHedge's picture

Has no-one considered that perhaps the Greeks are taking money out of the bank to pay the property taxes that are due in November, December, January and February? Sucking the very last drops of nectar from the flower, and wondering why it no longer tastes sweet. I haven't correlated the amounts withdrawn with the amounts the government wants to raise; it might be interesting to see.

Of course, it might be a bank-run, too, although everyone I know emptied their accounts years ago, what with being poverty-stricken and everything. Perhaps the elite have had a heads-up....who else here has cash to withdraw?

Dead Canary's picture

Humpty is about to get dumptied!

Hondo's picture

most remaining deposits would be under the insured limits........a good time to bail-in the debt holders 

small axe's picture

unfucking Greece begins under the mattress

DisorderlyConduct's picture

A perfect example of why failure should simply be allowed to fail. They would be well on the road to recovery had they not tried to just paper it over.

Five Star's picture

Greece owes the same amount of money as it did at the start of the crisis in 2010 despite 400 billion plus euro is 'bailouts'. Meanwhile the economy has shrunk by 40%...

http://thesoundingline.com/europe-is-on-a-precipice/

hvl626's picture

You did notice the Trokia now has total control of government actions?   And is demanding ownership of government assets?  At fire-sale prices ?

The Trokia has no concern about the economy.

SumTingWongJr's picture

Who the fuck would have any money in a Greek bank !  This will be an August circle jerk like 2 years ago.

youngman's picture

Oh Boy the Greeks are back...lets see..we say we are going to cut this ..this ..and this.....and you give us billions...and we do nothing but spend it on our pensions and freebies....good to go for another round or two..

JTimchenko's picture

All this should tell you something. The Euro is doomed. What to do? Simple.

Familiarize yourself with 5 concepts and 3 articles that are now freely available on the internet, and then decide when and how to buy gold and other real assets.

CONCEPTS:

1) A corrupt "Synod" of banks manipulates gold prices in the manner described in the novel "The Synod" by the same name;
2) The ability of the Synod to hold prices below the level physical buyers are willing to pay, starting in 2013, came from the Obama administration's willingness to throw away the US Gold Reserve and, before that, from the willingness of pro-EU liberals in Europe to throw away western European gold reserves. The era of government subsidized downward biased gold manipulation is about to end (although upward biased manipulation may soon commence to replace it as a source of profit to same corrupt banksters!)
3) The election of President Trump signaled that the free-for-all was over, and a cut off from access to the US gold reserve has either already happened or is in the works;
4) Because the Trump administration refuses or is expected to refuse to sign any more swap liens on Ft. Knox gold, there is no longer any gold in London to fill the vast difference between gold supply and demand;
5) There is a possibility that President Donald Trump will make America great again, in part, by moving to a gold standard, after dramatically devaluing the US dollar.

ARTICLES: (Actually McGuire's info is via audio)

http://averybgoodman.com/myblog/2017/01/29/comex-physical-gold-deliverie

https://www.forbes.com/sites/ralphbenko/2017/02/25/president-trump-repla...

http://kingworldnews.com/andrew-maguire-2-25-17/

mlambo's picture

Greece is a notoriously corrupt country, the result of having been ruled for so long by the Ottoman Turks, but Greeks are still not paying their taxes, most business is done with cash and money is laundered into new Mercedes and property with no questions asked. The Germans will get bored with propping up this semi failed state soon and pull the financial plug.

OverTheHedge's picture

You must know a different group of Greeks to the ones I know - no Mercedes here, just tatty old pick-up trucks and tractors. Everyone is struggling, no one has any money, and prices keep rising and rising. People don't pay their taxes, because the choice is pay tax or buy food.

My friendly neighbourhood taxi driver (you remember Greek taxi-drivers - retire before they are born, have guaranteed incomes and never work, according to the propaganda), has to pay health insurance/pension contributions of €15 per day. Most days he is not taking €15 euros. So guess what - he is behind with his contributions. Doesn't make him an evil, conniving tax-dodger - makes him poor.

I'm sure that Athens is full of tax-dodging thieving Greek millionaires - must be why the church gives out so much free food to the needy.

From where I sit, Greece has been sucked dry, and there is nothing left to suck on. You may have another viewpoint.