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Chart of the day: year over year growth in Greek deposits of non-financial customers

By Sober Look

As discussed before, the ECB no longer has control over liquidity conditions in Greece. The argument that one should be looking at the aggregate position of the Greek private sector with respect to the Eurozone as a whole is flawed. The Greek private sector can generally only rely on the Greek banking system for credit. At the same time the Greek private sector is moving liquidity out of the country, dramatically shrinking the availability of credit.

The chart below shows year over year growth in Greek deposits of non-financial customers – down 21.5% from previous February.

Source: GS

It’s important to note is that the outflows are not just coming from Greek households. Corporate and foreign deposits have been declining as well. Banks have become incapacitated as the run on the banking system continues.

Source: GS (click to enlarge)

Reuters: Another priority was restoring the flow of credit to the economy asGreek banks curbed lending because of a large outflow of deposits, the [EU] paper said.

The nation has become isolated. Anecdotal evidence suggests that Greek refineries for example are unable to obtain credit and tend to rely on Iran for crude oil supplies. The situation does not seem sustainable and any expectations of near term economic growth are simply unrealistic.

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Sober Look is a no-hype financial markets/macro blog that typically relies on data analysis, primary sources, and original materials. We keep it concise, to the point, with no self-promoting nonsense, and no long-winded opinions. If you are looking for Armageddon predictions or conspiracy theories, you will be thoroughly disappointed. Topics include financial markets, banking, asset management, risk management, derivatives, global economy, policy, and regulation, with the emphasis on finance education. Follow him on his blog or twitter.

1 Comment

  1. David_Lazarus says:

    I am looking at the figures for government debt and I am wondering where all the talk about Greece being spendthifts is based on. The level of debts seems miniscule in comparison to the overall level. So could this  be yet another example of a state being sacrificed to save the banks?