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 [8]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 [9]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.
More [8]:
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 [10]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.