2 billion euros withdrawn from bank accounts, but things are calm now 

The dramatic last 10 days in the Greek banking system confirmed that psychology largely determines the actions of investors and depositors as a strong linking between uncertainty and outflow of deposits was observed. And as uncertainty increased, deposits decreased. 

This led to an increase of deposit outflow from banks in the previous week. It is significant that in about 4 days from last Tuesday to last Friday, people withdrew deposits of 1,8 to 2 billion euros from the banking system, an amount that previously would have been withdrawn in a month, depending on tax and other obligations of the depositors.

 

In the last two days of the previous week, cash desks were literally emptied and all cash was transferred to the boxes. Meanwhile, individual depositors were not the only ones withdrawing money, as they were shortly followed by businesses that moved accounts and amounts of several millions. 

Faced with the feeling that the government and opposition were close to a solution to forming a new government on Monday, depositors seemed to be lying in wait. The pressure on the banking system decreased significantly along with the pace of withdrawals, thus partially relieving the bankers. 

Indicative of the seriousness of the situation is yesterday's statement by the Governor of the Bank of Greece G. Provopoulos, who told the Financial Times about the urgent need to form a government because the continuing uncertainty creates additional serious problems for the banking system. 

The impact of psychology on the behavior of depositors and the anxiety of political instability in recent days were particularly strong yesterday, especially after the profuse bandying of names concerning the new prime minister. It is characteristic that depositors have already began to look for new ways of securing their money, as bank boxes do not offer enough security any more. The debate is already turning to alternative solutions such as buying German bonds or converging euros to foreign currency, preferably U.S. dollars or Swiss francs. 

Given that the current crisis comes at a time when deposits of at least 60 billion euros have already been withdrawn, the situation makes banks more vulnerable than ever to incredible risks. The statement of a banker is indicative of the situation. Anxiously watching the developments, he said that the financial crisis has led to a banking crisis, which is so far within control, but now the politicians are doing everything they can to "blow things up." He added that if they fail to arrive as quickly as possible at a reliable solution that will calm the world, then the strength of the system will "betray" us faster than we had imagined.