Deposit outflows from Greece’s banks rose last week to around 3 billion euros, according to JP Morgan estimates, ahead of Friday’s last-minute aid extension agreement with the country’s eurozone creditors.
The 50 per cent increase in the pace of outflows from the prior week’s 2 billion euros meant Greek banks were on track to run out of collateral for new loans in eight weeks as opposed to 14 the week before, JP Morgan said.
This is based on its calculation that of a maximum 108 billion euros of financing available from the European Central Bank and Greek central bank, Greek banks have already used up 85 billion euros, leaving them with 23 billion euros if needed.
Hard data on Greek bank deposit flows come with a long time lag, meaning estimates are the most up-to-date guides.
Outflows apparently accelerated during last week.
They totaled more than 1 billion euros over Wednesday and Thursday, three senior banking sources told Reuters on Friday, and about 1 billion euros on Friday alone, another senior banker said.
Greece is discussing a list of reforms including measures to tackle tax evasion and corruption with international partners to ensure it is accepted. Approval will secure the financial lifeline outlined on Friday.
Total bank deposit outflows this year, which JP Morgan estimates by using a proxy of Greek demand for money market funds overseas, stand at around 25 billion euros – equivalent to more than 3 billion per week.
Outflows rose in the run-up to the Jan 25 election that brought the current government into office, dipping thereafter before rising again as the deadline for a debt deal neared.
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