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Attention Daiking - Retail Deposit Flight In Greece/ireland

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http://blogs.ft.com/...orst-nightmare/

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Since the beginning of the crisis, the Greek and Irish banking institutions have lost about 15 per cent of their retail deposits. The consequence of this bank run is that the ECB has had to replace this source of bank funding as well. The pace of withdrawal of bank deposits in Greece and Ireland is not quite as fast as that which occurred during the Argentinian crisis in 2000-02, and has not shown any sign of recent acceleration, but it adds a volatile and unpredictable element to the crisis. As the UK government found in the case of Northern Rock, the appearance of queues outside banks is one of the worst nightmares which a central bank can face. It has not happened in Europe – yet.

Not entirely sure why Portugal appears to have seen strong inflows. Anyone?

Edit: An article comment suggests it is Angolan oil money :huh:

Edited by Red Karma

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Great graph.

Interesting to see that the people with Irish "guaranteed" deposits don't trust the guarantees.

My advice for anyone wanting to see what can and will most likely happen around most of Europe is Argentina little over 10 years ago.

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Thanks for the concern. It's cropped up a couple of times over the past fortnight, to put figures on it (see link in later post). Actually sounds a lot compared to the debt.

I really thought we were going to face the mother of all haircuts last week but have survived to fight another day and don't need many more of those now. Only problem is out of the frying pan (euros) and into the fire (sterling). What's an idiot to do?

Edited by daiking

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Thanks for the concern. It's cropped up a couple of times over the past fortnight, to put figures on it iirc Greek deposits fallen from 220bn euros to 170bn. Actually sounds a lot compared to the debt.

I really thought we were going to face the mother of all haircuts last week but have survived to fight another day and don't need many more of those now. Only problem is out of the frying pan (euros) and into the fire (sterling). What's an idiot to do?

I'm sure General Congreve will be along to explain it shortly!

Are these charts up to date? I wod expect at least some acceleration over the last month as the default crisis has been in the news a lot for the plebs to see. I removed a few tens of thousand out of Ireland last month, I expect that alone to give the graph a blip at least ;)

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Two Irish people i work with in London have deliberately opened savings accounts with Dutch Banks in Holland since 2008 as "insurance" against the possibility that Ireland (and others) will be forced out of the Euro at some future date or will default

Edited by skomer

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Is it just because of the base they're starting from prior credit crunch - I think portugal had maybe the highest household indebtedness levels and lowest savings rates in europe? Also the largest bank Caixa Geral de Depositos (CGD) was already state-owned, with about a third of retail-deposits, so may as well keep it stick it in your local banks if government has always directly supported the sector?

Interesting point.

Some of Greece/Ireland may be down to 'austerity' fiscal policy too.

But they appear to be falling at a more or less consistent rate. I guess it'll also be the case that larger deposits will have exited first whilst your avg. punter has fewer options or inclination to move funds out of the country. ECB might be backstopping the holes but it's not difficult to imagine a scenario where a critical panic ensues. How many euros can you fit into Switzerland? :unsure:

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I removed a few tens of thousand out of Ireland last month, I expect that alone to give the graph a blip at least ;)

I look forward to the day you move the money back in. Good as gold!

Wonder when ....

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I look forward to the day you move the money back in. Good as gold!

Wonder when ....

I doubt it would go back there, there are better places.

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Re my point above..........

However, the roughly 8% deposit decline so far in 2011 also reflects the “cash-burn” effect of the country’s recession, with the economy expected to decline by 3.8% this year. We estimate that more than half of the year-to-date deposits decline is due to a steady draw-down of deposits to compensate for lower income by individuals and companies.

i.e. they're also rapidly becoming poorer

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My advice for anyone wanting to see what can and will most likely happen around most of Europe is Argentina little over 10 years ago.

I've been looking into the recently to get an idea of where this is all headed, probably deserves a thread of its own.

The best approach for individuals seems to have debt in the local (about to be worthless) currency but savings somewhere else.

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I've been looking into the recently to get an idea of where this is all headed, probably deserves a thread of its own.

The best approach for individuals seems to have debt in the local (about to be worthless) currency but savings somewhere else.

Just where exactly would somewhere else be, everyone appears foobarred.

Which only leaves something else, gold/food other barterable items.

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I've been looking into the recently to get an idea of where this is all headed, probably deserves a thread of its own.

The best approach for individuals seems to have debt in the local (about to be worthless) currency but savings somewhere else.

Some physical assets in Germany and liabilities in Euros is my approach. I think that I am likely to have "right way round" correlation between asset prices and the market value of debt.

Time will tell of course.

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