Money is leaking out of banks in southern Europe as customers scoop deposits out of Greece, Spain and Italy to move cash to less indebted nations such as Germany.
Greece’s total deposits plunged 28 percent from the peak in June 2009 to 169 billion euros ($225 billion) at the end of December, according to data compiled by Bloomberg. In Spain, deposits slid 5 percent in the five months through November to 934 billion euros, the least since April 2008. Italian banks held 974 billion euros in November, the lowest in 18 months.
“As a system, we’ve preferred to offer a higher yield for longer-term funding,” said Alessandro Santoni, head of strategic planning at Banca Monte dei Paschi di Siena SpA, Italy’s third-biggest bank. “The Italian banking system isn’t particularly leveraged and now it’s deleveraging because deposits are growing below the rate of inflation.”
Declines in Spain and Italy picked up speed amid contagion from Greece in the middle of last year. Company deposits slumped 11 percent in Spain from June to November, and in Italy by 6.5 percent, with multinational companies keeping as little money as possible in the most affected nations. For individuals, the decline was less than 3 percent in Spain and about 1 percent in Italy.