Bank runs begin as ‘Grexit’ crisis continues

cyprusguneyFearing a “Grexit” — a Greek exit from the European Union over differences regarding conditions surrounding a 2012 Eurozone bailout of the fabled nation — scores of Greek depositors have begun taking money from banks and running.

As reported by CNBC, the run on banks comes amid a “dramatic showdown in Brussels” between the newly elected left-wing Greek government and European creditors. Depositors are being spooked by the thought of a potential Greek default or worse, a pull-out from the EU and a return to the drachma, Greece’s former currency. The depositors are pulling out record amounts of cash.

As reported by CNBC:

The Bank of Greece and the European Central Bank won’t report official cash outflows for January until the end of the month. But sources in the Greek banking sector have told Greek newspapers that as much as 25 billion euros (US $28.4 billion) have left Greek banks since the end of December.

The same sources estimated that €900 million were taken from Greek banks on a single day recently — the day after talks broke down in Brussels, which stoked fears among Greeks that some sort of measure would be implemented to stop the outflow of euros. By mid-afternoon the following day, CNBC reported, deposits had shrunk to about €680 million (around $773 million). Read Full Article