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Economy
In reply to the discussion: Weekend Economists View the Trojan Horse June 15-17, 2012 [View all]xchrom
(108,903 posts)43. Greek, Spanish savings flee eurozone crisis
http://hosted.ap.org/dynamic/stories/E/EU_EUROPE_MONEY_FLIGHT?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-06-16-07-31-12
ATHENS, Greece (AP) -- Savers across Europe are fleeing the continent's debt crisis. In Europe's most economically stricken countries, people are taking their money out of their banks as a way to protect their savings from the continent's growing financial storm. Worried that their savings could be devalued, or that banks are on the verge of collapse and that governments cannot make good on deposit insurance, people in Greece, Spain and beyond are withdrawing euros by the billions - behavior that is magnifying their countries' financial stresses. The money is being hoarded at home or deposited in banks in more stable economies.
In Greece and Spain, two of the hardest-hit by the debt crisis in the 17 countries that use the euro, savers and businesses are already pulling money out of banks. They are either worried that their money could be converted into a new currency at a much lower value or because their bank might be on the verge of collapse.
It's a steady bank "jog" at the moment than a full-bore run. But it threatens to undermine the finances of those countries' already-stressed lenders. And if it does turn into a full bank run after Greece's crucial election on Sunday, it could hasten financial disaster in Europe and help spread turmoil around the world.
Since the Greek debt crisis broke in late 2009, deposits have fallen by 30 percent cent, as savers have slowly pulled some (EURO)72 billion ($90.24 billion) from local lenders, with total household and corporate deposits standing at (EURO)165.9 billion ($207.94 billion) in April, according to the latest data from the Bank of Greece.
ATHENS, Greece (AP) -- Savers across Europe are fleeing the continent's debt crisis. In Europe's most economically stricken countries, people are taking their money out of their banks as a way to protect their savings from the continent's growing financial storm. Worried that their savings could be devalued, or that banks are on the verge of collapse and that governments cannot make good on deposit insurance, people in Greece, Spain and beyond are withdrawing euros by the billions - behavior that is magnifying their countries' financial stresses. The money is being hoarded at home or deposited in banks in more stable economies.
In Greece and Spain, two of the hardest-hit by the debt crisis in the 17 countries that use the euro, savers and businesses are already pulling money out of banks. They are either worried that their money could be converted into a new currency at a much lower value or because their bank might be on the verge of collapse.
It's a steady bank "jog" at the moment than a full-bore run. But it threatens to undermine the finances of those countries' already-stressed lenders. And if it does turn into a full bank run after Greece's crucial election on Sunday, it could hasten financial disaster in Europe and help spread turmoil around the world.
Since the Greek debt crisis broke in late 2009, deposits have fallen by 30 percent cent, as savers have slowly pulled some (EURO)72 billion ($90.24 billion) from local lenders, with total household and corporate deposits standing at (EURO)165.9 billion ($207.94 billion) in April, according to the latest data from the Bank of Greece.
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