Thursday, June 16, 2016

European Banks Fleeing European Banks

Like a gang of clowns in a pie shop.*
From the Wall Street Examiner:

Chart of the Decade: European Banks Fleeing German Banks Like Rats From A Sinking Ship 
Smaller banks often deposit funds in bigger banks. The level of banks’ deposits at other banks is a reflection of their confidence in the system as a whole. The ECB measures and is kind enough to share with us the level of bank deposits in other banks in Europe, breaking the data down by country and the Eurozone as a whole.

Banks have been pulling their money out of other banks in Europe like rats deserting a sinking ship since 2012. Even the advent of QE in 2014 only slowed the stampede. European banks are still gettin’ out of Dodge.
Current data is as of month end April. Since June of 2012 when European interbank deposits peaked, the banks have pulled €1.28 trillion or 19.4% of their total deposits from other European banks. That’s an annual rate of decline of 5.2%. In the past year they have withdrawn €164 billion at an annual rate of decline of 2.8%. And the number is only that good because of a seasonal dead cat bounce in April.

The picture is even worse for Germany, with its biggest bank, Deutsche Bank on the ropes. European banks have pulled €243 billion, or 16.2% of their total deposits from German banks since the 2012 peak....MORE

*Some background on that line:
May 22, 2008
"Like A Gang of Clowns in a Pie Shop": S&P Puts Moody's on Credit Watch (Negative)
 Gleefully purloining Tim Annett's magnificent description* of loser brokers downgrading loser brokers, we present, from Bloomberg:...