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Shell Pulling Cash Out Of Europe Due To "Shift In Willingness To Take Risk"

Tyler Durden's picture


Even as the ECB is desperately doing its best to stick a finger in every hole in the leaking European dam, in which just like in the US failed monetary policy is a substitute for sound fiscal one, and in which the pattern of interventions and cause and effect will now follow that of Japan until the bitter end, others are not waiting around to see the results. Reuters reports that Royal Dutch Shell is pulling some of its funds out of European banks "over fears stirred by the euro zone's mounting debt crisis, The Times reported on Monday." And shell is not the only one: more and more institutional are actively preparing to lock up their cash on a moment's notice, an eventuality which can be seen best at the ECB itself, where deposits with the ECB (collecting 0.00%), dropped to just €300 billion the lowest since 2011, while the ready for withdrawal current account saw holdings rise to a record €550 billion overnight, a €20 billion increase overnight. And so the cycle repeats anew, and Gresham's law rises to the surface, as bad money pushes out good money, and in return the situation deteriorates once more, until the next time much more than just harsh language out of the ECB will be needed just to preserve the status quo.


The company's chief financial officer Simon Henry told the newspaper that Shell is cutting back its exposure to European credit risk in the worst-hit economies and putting a higher price on doing business with the region's peripheral nations.


"There's been a shift in our willingness to take credit risk in Europe. The crisis has impacted our willingness to afford credit," Henry is quoted as saying.


Henry is cited as saying that the Anglo-Dutch oil major would rather deposit $15 billion of cash in non-European assets, such as U.S. Treasuries and U.S. bank accounts.


The firm is forced to keep some money in Europe to fund its operations, but is keeping the bulk of its reserve liquidity out of the euro zone to avoid growing macroeconomic risk, the report said.

And what Shell is doing, everyone else can't be far behind - certainly not the head of a Greek bank who decided to pull his money out of Greece and "launder" it via London real estate: just as so many others are doing.

A political row has erupted in Athens after the former head of a big Greek state bank admitted to transferring €8m of personal savings abroad to buy a London property months before his Agricultural Bank headed towards insolvency.


Theodoros Pantalakis, former chief executive of Greece’s Agricultural Bank (ATEbank), strongly denied any wrongdoing, telling Realnews, a Greek website, that he had declared the transaction to authorities in 2011 and had paid tax on the amount transferred.


“I’m on holiday and I don’t plan to say anything more until I come back to Athens,” Mr Pantalakis told the FT from his villa on the Aegean island of Paros. He is expected to testify on his three years at the helm of ATEbank before a parliamentary committee at the end of August, said a person with knowledge of the dispute.

And that, in a nutshell is Europe: do as I say, and "believe" what I say... Just not what I do.

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Mon, 08/06/2012 - 07:01 | 2681112 malikai
malikai's picture

Corporate bank runs? Sounds like fun.

Mon, 08/06/2012 - 07:32 | 2681152 MassDecep
MassDecep's picture

Shell owns the ECB.

Think of this on these terms......

Mon, 08/06/2012 - 10:06 | 2681507 Deo vindice
Deo vindice's picture

Trusting your money to the banks has always been a sort of a "shell game". Now it's just more obvious.

Mon, 08/06/2012 - 07:02 | 2681113 Ghordius
Ghordius's picture

LOL - finally we are starting to see some articles mentioning Gresham's law, of bad money driving good money away.

Please don't forget that in the case of the USD and the EUR this could mean that each currency will behave differently inside and outside it's zone.

Mon, 08/06/2012 - 07:17 | 2681131 cossack55
cossack55's picture

I was under the impression (demonstrated daily) that the "rule of law" was "suspended" in the western world.  Would that not also apply to Gresham?

Mon, 08/06/2012 - 07:22 | 2681138 EL INDIO
EL INDIO's picture

Gresham's law is more like a natural phenomenon, you can’t suspend that.

Mon, 08/06/2012 - 07:43 | 2681165 flacon
flacon's picture

"I have abandoned Free Market [natural] principles, in order to save the Free Market [natural] system" ~ George Bush

Mon, 08/06/2012 - 07:48 | 2681171 Ghordius
Ghordius's picture

"I have closed the gold window in order to keep the gold" ?? But Nixon did not say that - not this way, at least...

Mon, 08/06/2012 - 07:50 | 2681176 malikai
malikai's picture

"I am not a crook." - Nixon

Mon, 08/06/2012 - 07:25 | 2681145 Ghordius
Ghordius's picture

the more the "rule of law" is not kept, the more "Gresham's law" applies. I suspect you know this...

Mon, 08/06/2012 - 07:53 | 2681177 malikai
malikai's picture

Future growth industries in Europe and the US:


  • Lake metals recovery diver.
  • Soylent corporation.
Mon, 08/06/2012 - 08:53 | 2681301 cossack55
cossack55's picture

I'm just being a Monday AM smartass.  Nonetheless, it seems the Law of Gravity does not apply to Wall Street (tho I will admit that I have not checked the status to the Strategic Helium Reserve lately).

Mon, 08/06/2012 - 07:10 | 2681121 EL INDIO
EL INDIO's picture

If this is the beginning of it, watch out for a USD spike and probably a market crash.


(That is what Ben is waiting for to launch the final QE)

Mon, 08/06/2012 - 07:34 | 2681153 bigwavedave
bigwavedave's picture

final? you mean "next"

Mon, 08/06/2012 - 07:41 | 2681159 EL INDIO
EL INDIO's picture

I think this is the last USD surge.


The next QE will probably kill it for good.

Mon, 08/06/2012 - 07:46 | 2681169 Ghordius
Ghordius's picture

I would not be surprised if we have several surges, currencies have a strange quantity=quality effect that works in favour of the humungous ones...

Mon, 08/06/2012 - 07:50 | 2681175 EL INDIO
EL INDIO's picture

Things have deteriorated way too much for the USD (or the current western dominated financial system) to survive as it is.

Mon, 08/06/2012 - 09:16 | 2681357 Quinvarius
Quinvarius's picture

The USD and the Euro are the same exact thing.  As long as they are interchangable, and central banks are managing exchange rates with their printing presses, EUR and USD are the exact same currency.  There is nothing real in either of them.  That is why the exchange rates can be set where ever the CBs want to set them.  There are only two forms of money in the world now; fiat and PM.  Fiat is an illusionary ponzi scheme best not trusted. 

Mon, 08/06/2012 - 07:16 | 2681127 virgilcaine
virgilcaine's picture

Fiat on the run.

Mon, 08/06/2012 - 07:18 | 2681132 Jlmadyson
Jlmadyson's picture

But but but Risk On? Right? RIGHT

Mon, 08/06/2012 - 07:20 | 2681134 tok1
tok1's picture

more UDS propaganda  US xorporates / banks quick put yoyr money in tres (there not all long and looking at losses id tres sell off)   Spains survived 1y 6-7% rates how long qould US banks last at plus 5% mm one week maybe...

Mon, 08/06/2012 - 09:10 | 2681346 Quinvarius
Quinvarius's picture

Obviously this was typed on the crapper using a Droid.

Mon, 08/06/2012 - 07:24 | 2681144 Peter K
Peter K's picture

Speaking of Gresham's law, hard to see it functioning in Euroland. Drahgi just announce unsterilized (can't do sterilized since lack of money good assets) QE to keep Spitaly afloat, a tidy sum of 1tEuro or 1.23tUSD. This sum represents QE1+QE2. So what does the Euro currency do? Rallies 3 big figures.  Hmmmm. Something is definately wrong with this picture. :)

Mon, 08/06/2012 - 07:31 | 2681150 Ghordius
Ghordius's picture

Dear Peter K, you are quoting Draghi, like everybody and his grandmother. But did you understand the key message he is sending? To me it looks like the whole ZH crowd did not.

He explained, in unmistakeble terms, that any concerted bear party targeting the eurozone is going to be kneecapped by unlimited €-firepower.

All the rest is - hehehe - speculation. A word that sounds differently in the eurozone. Blame a cultural devide between continent and UK/US.

Mon, 08/06/2012 - 07:26 | 2681146 Joe A
Joe A's picture

So the US is profiting from the financial and economic crisis they unleashed on the world? Sounds familiar and almost makes it sound like a plan.

Mon, 08/06/2012 - 08:07 | 2681204 Bazza McKenzie
Bazza McKenzie's picture

The US (bad as is its own economic situation) is not responsible for the fact European countries have spent decades living beyond their means.  Nor for the fact they introduced the euro and then the PIIGS went on a massive spending binge (courtesy of German-like interest rates) while simultaneously running down their productive capacity, and with their respective governments increasing their spending based on the boost in taxes they got from the spending binge that had to be temporary. Nor is the US responsible for the fact those countries won't stop trying to live beyond their meams.

Time other countries took responsibility for their own failures.


Mon, 08/06/2012 - 10:07 | 2681449 Joe A
Joe A's picture

No doubt that the US has a bad economic situation. No doubt that some European countries were living above their means or that the Euro was flawed by design because the MOFO politicians wouldn't listen to the economists. But that was not my point. My point was that it was the US that sold the world toxic MBS and other financial instruments. Question is, did the world know what they were buying or were they tricked into buying them? The US got rid of a lot of bad debt and it would not surprise me at all if this was done on purpose (for sure the financial institutions did this on purpose. what else is better than some sucker who wants to buy your toxic debt?). Another question is, did the political level know this?

PS. The US has/is also living above her means. In Q2, for every dollar made, 2.3 dollars of debt were created.

Mon, 08/06/2012 - 07:44 | 2681167 disabledvet
disabledvet's picture


Mon, 08/06/2012 - 09:09 | 2681342 Quinvarius
Quinvarius's picture

And of course, absolutely none of the money being yanked due to credit and counter party risk will find its way into gold and silver as the whole financial landscape changes. 

Mon, 08/06/2012 - 09:25 | 2681384 lindaamick
lindaamick's picture

One more step by a transnational corporation to transition from a world of sovereign states to a world of sovereign corporations. 

Soon transnationals will cast off the regulations of banking becoming their own banks and will have their own standing armies.  

It was only a matter of time before corporate "buying of politicians" as middlemen to do the bidding of the corporation became unnecessary. 

Look at the Libya attack by NATO.  The sovereignity of that country was ignored and the country attacked on purported "humanitarian" justifications.  Syria will be another example.  Europe is under siege as well by Financial transnationals. 

The war going on globally is the war between transnationals to become the biggest and most powerful of all institutions.   This IS the end game of predatory capitalism. 


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