Deposits down adding strain to Greek banks

first_img Facebook Twitter: @NeosKosmos Instagram Business and household bank deposits fell 3.7 percent in October, continuing their steady decline this year, the central bank said this week. Bank of Greece data showed deposits dropped to 176.4 billion euros in October from 183.2bn euros in the previous month – a fall of 6.8bn euros. Households deposits fell to 146.9 billion euros from 152.3 billion euros over the same months, respectively. The Bank of Greece governor, George Provopoulos, speaking in parliament last week, said that bank deposits showed signs of improvement in November after the stabilisation of the political situation in the country. Deposits have shrunk by 33.2 billion euros or 15.8 percent since the beginning of 2011. A shrinking deposit base – in part caused by capital flight – has added to the strains of the country’s banks, who have become dependent on ECB funding for their liquidity needs as access to wholesale funding remains shut on sovereign debt fears. Meanwhile, Greek banks continued lowering their dependence on ECB liquidity mechanisms, while they raised their borrowing from the central bank’s extraordinary liquidity mechanism. ECB funding to the country’s banks fell by 3.46 billion euros in October from the previous month while emergency liquidity assistance (ELA) from the central bank rose to 36.25 billion euros, the Bank of Greece data showed. Greek banks tapped 9.69 billion euros in ELA funding in October after drawing 20.14 billion in September. The Bank of Greece did not provide details on which banks made use of the facility. ECB lending to Greek banks dropped to 74.3 billion euros at the end of October from 77.7 billion in September, the Bank of Greece said. ECB funding to Greek lenders almost doubled in 2010 reaching 97.67 billion at the end of December.last_img read more