OSC Osaka Corp - Depositors Pull Cash Out of Greek Banks
Osaka Corp OSC, Greek bank depositors are withdrawing money from their banks at a rate of €2 billion a week.
Greese, April 6, 2015 (Newswire.com) - OSC - As the deadlock between Greece’s Syriza-led government and its Eurozone partners over a renegotiation of the country’s bailout continues, Greek depositors are withdrawing €2 billion a week form Greek banks in case Greece crashes out of the euro.
The figures came from US banking giant, JP Morgan Chase which claimed that, if outflows were to continue at the current rate, the Greek banks would run out of money to use as collateral within as little as 3 months.
"Basically, the Greeks saw what happened to Cyprus in 2013 and they're taking steps to ensure it doesn't happen to them,"
OSC Osaka Corp , Analyst
“Basically, the Greeks saw what happened to Cyprus in 2013 and they’re taking steps to ensure it doesn’t happen to them,” an OSC Osaka Corp analyst remarked alluding to the capital controls imposed on Cyprus’s banks during and after the bailout of the country’s oversized banking sector. Cyprus was the first Eurozone country ever to impose capital controls which included a maximum daily cash withdrawal from accounts of €300 and a €3,000 limit on banknotes leaving the country.
It is feared that if Greece leaves the euro zone, it will almost certainly return to its former currency, the drachma which is likely to be instantly devalued resulting in runaway inflation. Greek depositors are trying to hoard their euros in case this happens.
“Negotiators on both sides appear no closer to reaching an agreement but, ultimately, we think a compromise will be reached. We suspect the EU finance ministers are dragging things out to show other bailed out countries like Portugal and Ireland that the tearing up of existing agreements will not be taken lightly,” the OSC Osaka Corp analyst concluded.