"There’s been a lot of focus on US money market withdrawals from European banks adding to the current market stress in Europe. But could this be a bit of a red herring?
Kash Mansori at the Street Light blog has pulled data from the ECB’s data warehouse, showing a steep decline in deposits held by European monetary financial institutions (MFIs) — that is, banks and money market funds.
In other words, could European institutions be pulling deposits out of Eurozone banks just as much as US money market funds are reportedly doing?
Until recently, this hasn’t been a problem because many of the withdrawals by MFIs themselves have been partially offset by an increase in deposits by non-MFIs such as households and corporations — except, in Ireland and Greece, where the non-MFIs apparently lost confidence in their own banks.
Anyhow, the total amount of withdrawals from EU countries’ MFIs by other non-European MFIs is large — almost €700bn from January 2010 to July 2011 — and that includes the UK, which has had particularly sizable withdrawals totalling almost €250m, coupled with a decrease in non-MFI deposits..."
at http://ftalphaville.ft.com/blog/2011/09/05/669051/european-banks-slow-run-on-themselves/
Kash Mansori at the Street Light blog has pulled data from the ECB’s data warehouse, showing a steep decline in deposits held by European monetary financial institutions (MFIs) — that is, banks and money market funds.
In other words, could European institutions be pulling deposits out of Eurozone banks just as much as US money market funds are reportedly doing?
Until recently, this hasn’t been a problem because many of the withdrawals by MFIs themselves have been partially offset by an increase in deposits by non-MFIs such as households and corporations — except, in Ireland and Greece, where the non-MFIs apparently lost confidence in their own banks.
Anyhow, the total amount of withdrawals from EU countries’ MFIs by other non-European MFIs is large — almost €700bn from January 2010 to July 2011 — and that includes the UK, which has had particularly sizable withdrawals totalling almost €250m, coupled with a decrease in non-MFI deposits..."
at http://ftalphaville.ft.com/blog/2011/09/05/669051/european-banks-slow-run-on-themselves/
