Greek Deposits Now Lowest Since 2005; One Third Of Bank Assets Now ECB-Funded

As a refresher, here’s the latest on Greece. Greek PM Alexis Tsipras is scrambling to “reshuffle” his negotiating team after embattled FinMin Yanis Varoufakis’ “lecturing” finally pushed EU officials over the edge in Riga last Friday. A government decree to sweep excess cash reserves from local municipalities has unsurprisingly proven to be quite controversial, leaving the government short some €400 million for pensions and salaries. Athens is still playing the Russia/Gazprom pivot card in a pitiable effort to demonstrate that Greece still has one last trick up its negotiating sleeve, and anarchists are attacking Varoufakis at dinner. You can’t make this stuff up. 

In the midst of this, the Greek banking sector continues to bleed cash as the latest data from the ECB shows deposits fell by another €2.5 billion in March, bringing the total to €27 billion (or around half a month’s worth of PSPP purchases) since December. Here’s more via Goldman:

The ECB released the March deposit data today (April 29), which paints a solid deposit picture across all markets, with the exception of Greece. Here, deposit outflows continued and reached €2.5 bn in March, driven by the decline in retail (-2%), public sector/other balances (-5%).

And of course more ELA means more deposit flight…

Between December and March, the Greek banks have lost €27 bn of deposits, a 16% decline. During this period, the stock of corporate deposits is down 29%, retail 13% and other 14%. The hike in the Emergency Liquidity Assistance (ELA) limit by a further €5.6 bn in April implies that outflows may have re-accelerated in recent weeks. 

Without market access, the ECB remains Greek banks’ sole refinancing avenue. Greek usage of ECB facilities has increased by >€60 bn over the past four months. The Greek banking system – representing 1.2% of Euro area assets – now accounts for 18% of total ECB facility usage. 27% of all Greek bank assets are now ECB-funded.