Bank Runs in Europe: Reflection of the Global Financial Crises of 2009

"We often talk of once bitten twice shy, or so the saying goes. The current financial crisis in Greece, which is mooted to have spread to Spain, is causing bank runs in Europe albeit fears that the ‘wind’ that swept across the globe in 2009 is on the horizon. Greece has lost more than one third of its bank deposits as investors continue to seek for safer havens for their money. Spain, on the other hand has already shaded out more than $50 billion through direct withdrawals from banks, despite losing more than $140 billion from investment sellouts.

Bank Runs in Europe Mirroring the 2009 Global Financial Crises

Toward the end of the year 2008, a similar scenario took place at the Wall Street that sounded the beginning of the global financial crises. The current bank runs in Europe, albeit at the early stages, is nothing very different to what marked the beginning of 2009 global financial crises. The current divestiture taking place in Greece and Spain can only spark global crises if not monitored.

Even U.S banks with operations in Europe have already started feeling the pinch, as reported early this year during in their end year financial statements. The likes of Citigroup Inc. (NYSE:C), Unicredit Group, headquartered in Milan with operations in 22 countries including the U.S, and Credit Suisse Group AG (NYSE:CS) headquartered in Zurich with operations in U.S, can bear witness to the impact of Greece financial crises. Some investors continue to substitute their Euro denominated assets with the pound or the dollar, while others seek the refuge of their investments in what appears to be stronger Euro zone countries, like Germany..."

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