An accelerating flight of deposits from banks in four
European countries is jeopardizing the renewal of economic growth and
undermining a main tenet of the common currency: an integrated financial
system, according to folks at Bloomberg
A total of 326 billion euros ($425 billion) was pulled from
banks in Spain, Portugal, Ireland and Greece in the 12 months ended July 31,
according to data compiled by Bloomberg. The plight of Irish and Greek lenders,
which were bleeding cash in 2010, spread to Spain and Portugal last year.
The flight of deposits from the four countries coincides
with an increase of about 300 billion euros at lenders in seven nations
considered the core of the euro zone, including Germany and France, almost
matching the outflow. That’s leading to a fragmentation of credit and a
two-tiered banking system blocking economic recovery and blunting European
Central Bank policy in the third year of a sovereign-debt crisis….
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