The Spanish bank run has started
21 January 2012 @ 17:07
It looks like the Spanish bank run has started, with Spaniards withdrawing billions from banks last year due to fears about the Spanish banking system and a possible return to the peseta.
According to the Telegraph, in the 11 months to November 2011, "€48bn, equal to just under 3pc of total Spanish bank deposits" was withdrawn from Spanish banks and cajas. So it looks like the Spanish are starting to do what the Greeks and Irish have been doing over the last couple of years. So far it looks more like an invisible bank run at the moment. There haven't been any Northern Rock style queues outside the banks. At least not yet....
It seems wise to keep as little cash as possible in the Spanish banking system, just to be on the safe side. This is what I have been doing and most of the people I know in spain, both Spaniards and expats are doing exactly the same. At the end of the day, you don't want to end up with a pile of worthless pesetas do you?
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Clive said:
21 January 2012 @ 21:32
A bit sensationalist no? The Telegraph is hardly known for its europhile approach to economic reporting. I´d argue that in a country tackling 23% unemployment, dealing with the impact of 8 years of champagne socialist spending, and now implementing some seriously harsh austerity measures, withdrawal of under 3% in deposits is actually quite an achievement. (compared to 20% of the deposit base in Greece) The figure includes private, commercial and public deposits - Spain´s Town Halls are just about bankrupt, businesses continue to fail, and people that have received their 24 months of paro are now forced to draw on their savings. I see no evidence whatsoever of capital flight out of the country. Debt delinquency is also at it highest level in 14 years at over 7.5%.
Germany on the other hand, which posted its lowest unemployment figures since reunification saw, as you might expect, deposits up 9%.
By advising everyone to keep as little cash in the system as possible you're simply contributing to the uncertainty, which makes matters worse here in Spain. In the end, when enough people are spooked by unfounded rumours, it becomes a self-fulfilling prophecy. 48 billion euros of withdrawals across the entire Spanish banking sector and spread over a whole year (again, under 3% of deposits), doesn't constitute a bank run, it doesn't even come close. Compare that to Northern Rock that saw over a billion pounds withdrawn one wet Friday in September 2007, now that's a bank run.
foxenburg said:
22 January 2012 @ 18:45
Well, the Telegraph isn't inventing any of this. The facts are that people in club med are pulling money out of their banks and either converting it into dollars, swissies, etc or at least stashing it in German banks. More sensible is to buy precious metals. Most people could be philosophical about having a few hundred Euros in their Spanish account devalued, but if you've got your life savings tied up in a caja you'd be crazy not to withdraw it and put it somewhere safe. Read up on Zimbabwe or Argentina devaluations.
foxenburg said:
22 January 2012 @ 19:39
Well, the Telegraph isn't inventing any of this. The facts are that people in club med are pulling money out of their banks and either converting it into dollars, swissies, etc or at least stashing it in German banks. More sensible is to buy precious metals. Most people could be philosophical about having a few hundred Euros in their Spanish account devalued, but if you've got your life savings tied up in a caja you'd be crazy not to withdraw it and put it somewhere safe. Read up on Zimbabwe or Argentina devaluations.
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