Greek bank outflows accelerate, reached 5b euros in April: bankers

[ATHENS] Greek banks have seen deposit outflows accelerate over the past week as fears rise that the eurozone country will default on debt, two banking sources said on Wednesday.

The spike follows a steady outflow of money from Greek lenders this year as Athens and its creditors struggle to agree an aid-for-reforms deal before Greece runs out of money.

"The past week in May was more challenging compared to the previous ones in the month, with daily outflows of 200 to 300 million euros in the last few days," a senior Greek banker said.

Outflows picked up in April to about 5 billion euros (S$7.35 billion) from 1.91 billion euros in March, three Greek bankers told Reuters. Official data on April deposits will be released by the Bank of Greece on Thursday.

Speculation about capital controls has resurfaced after a prominent lawmaker from the conservative opposition said she was worried about the prospect if no deal is reached with creditors and Athens defaults on an IMF payment next month. The government's spokesman has dismissed such a scenario.

After suffering deposit outflows of 12.25 billion euros in January and another 7.57 billion euros in February, banks have relied on emergency liquidity assistance (ELA) from Greece's central bank, for which they must put up collateral.

The European Central Bank did not raise a ceiling on emergency funding for Greek banks at its weekly review on Wednesday, a banking source said, the first time since February it has left the cap unchanged.

REUTERS