Bank Deposits Update: Spain is in trouble

Time for another bank deposit update for the month of April 2013.

Cyprus continued to have a bank run in deposits, but the most interesting event is that Spain's deposits are starting to deteriorate too.

Guess where the deposits are going to? Yes, Germany, France, Italy and even Belgium.

That means that money is flowing from the periphery into the center of Europe. I wonder how long this imbalance can continue.

Chart 1: Bank Deposits Periphery of Eurozone

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Bank Deposits Update

Remember the Cyprus debacle in March? We were worried about deposits declining.

In February, deposits declined in Cyprus, Ireland, Greece, Portugal. But they increased in Italy and Spain.

In March, we see the same happening again. So I don't see any significant changes. Maybe the Cyprus crisis was just a little drop in the sea.

Chart 1: Bank Deposits

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Bank Deposits Update

Latest data shows no deposit flight yet in February 2013. Greece did decline together with Portugal, Ireland and Cyprus. But Italy and Spain had deposit increases.

We'll see what happens in March 2013...

Chart 1: Deposits Eurozone

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Will Europe Break Up?

Lately, there have been more and more articles popping up about a Eurozone break-up. Let's objectively analyze if this concern is validated. To make it easier for me I'll consider the PIIGS (Portugal, Ireland, Italy, Greece, Spain) to be southern Europe.

The different aspects I will look into are the following:

1. Unemployment Rate
2. Bond Yields
3. GDP
4. Debt
5. Inflation Rate
6. Current Account
7. Government Budget

To see my analysis, go to my article: Will Europe Break Up?

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Banks And Their Exposure to the PIIGS

In the news of today, Spain has been in the center spot of attention. Spanish bond yields have been rising quickly and financials have seen weakness in their share price. In this article I want to see which banks have the most exposure to Spain and to the PIIGS in general.

During the stress tests of July 2011 the exposure of 90 banks to the PIIGS countries' government debt was released by the European Banking Authority (EBA).

To find out which banks are exposed to the PIIGS and which banks to avoid, please go to my article here:
Analyzing bank exposure to the PIIGS

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Employment Deteriorating for the PIIGS

Since the crisis of 2008, the unemployment rate for the PIIGS has been increasing rapidly. As a consequence, lately investors are putting their hard earned money in more healthy countries like Switzerland and Germany.

Go HERE to read a more in depth analysis on this matter.

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