Tuesday, November 29, 2011

Greek banks suffer surge in withdrawals

Financial Times
November 29, 2011

The head of Greece’s central bank said on Tuesday that deposits had shrunk significantly in the past two months as the public withdrew billions of euros in reaction to mounting political tension.

George Provopoulos, the central bank governor, told a parliamentary committee that outflows from the banking system increased to €5.5bn in September and €6.5bn in October.

“These were two very bad months because of political uncertainty,” said Mr Provopoulos, who was presenting the bank’s first-half report on the Greek economy to the house economic affairs committee.

Outflows tripled compared with the same two months of last year when about €4bn left the system, according to figures published by the Bank of Greece.

Analysts said the withdrawals reflected specific economic and political events as the socialist government of George Papandreou, the former prime minister, struggled to meet budget targets before imploding over a failed plan to call a referendum on the latest bail-out deal.


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