First Greece, now Spain doing a Bank Run...Who's next?

Greece withdrawing massive amounts of Euros from savings Greece Bank Run

Now Spain is admitting that over 1 billion Euros removed this last week:

Shares in Bankia, the Spanish bank which was part-nationalized last week, plunged by over a quarter on Thursday morning, after a report that customers had withdrawn €1bn from the bank over the past week.

Shares fell 27 per cent to €1.21 after El Mundo, a national Spanish newspaper, reported customers had withdrawn €1bn from the bank over the past week, citing information from a recent board meeting.

The self-styled “the leader of the new banks” was formed from seven cajas last year and has now shed nearly 70 per cent of its market capitalization since its shares were listed in July of last year.

The fall helped to drive the broader IBEX 35 index down 2 per cent to 6,480.7.

Link:
Pain in Spain falls mainly on the Banks

reuters link:
Bankia Customers pull money

Who's next to continue the domino effect?

Sirric

reply to post by sirric

your second link is not working. bank run in spain ? you sure ?

Greek Depositors Withdrew $898 Million From Banks Monday Greek depositors withdrew €700 million ($898 million) from the country's banks on Monday, fueling fears of a bank run amid the growing political disarray. With deposits falling, Greek banks become even more dependent on the European Central Bank to meet their funding needs, exposing the central bank to potentially huge losses if Greece leaves the euro area. Monday's deposit withdrawal far outpaced Greek banks' steady decline in deposits since the start of the country's debt crisis in 2009, as depositors withdraw cash and transfer funds overseas. In the past two years, deposit outflows have generally averaged between €2 billion and €3 billion a month, though in January they topped €5 billion. The latest data from the Greece's central bank show that total deposits held by domestic residents and companies stood at €165.36 billion in March.

Spain Underplaying Bank Losses Faces Ireland Fate May 10, 2012

Spain is underestimating potential losses by its banks, ignoring the cost of souring residential mortgages, as it seeks to avoid an international rescue like the one Ireland needed to shore up its financial system. The government has asked lenders to increase provisions for bad debt by 54 billion euros ($70 billion) to 166 billion euros. That’s enough to cover losses of about 50 percent on loans to property developers and construction firms, according to the Bank of Spain. There wouldn’t be anything left for defaults on more than 1.4 trillion euros of home loans and corporate debt. Taking those into account, banks would need to increase provisions by as much as five times what the government says, or 270 billion euros, according to estimates by the Centre for European Policy Studies, a Brussels-based research group. Plugging that hole would increase Spain’s public debt by almost 50 percent or force it to seek a bailout, following in the footsteps of Ireland, Greece and Portugal. “How can you only talk about one type of real estate lending when more and more loans are going bad everywhere in the economy?” said Patrick Lee, a London-based analyst covering Spanish banks for Royal Bank of Canada. “Ireland managed to turn its situation around after recognizing losses much more aggressively and thus needed a bailout. I don’t see how Spain can do it without outside support.”

And this is just the losses that Spanish banks face on their real-estate portfolios. They are also now facing losses on all the Spanish sovereign debt that they bought with their LTRO funding as well. Very simply, Spain now needs a massive rescue, and soon.

Meanwhile German citizens are all done with helping their southern neighbors. Merkel has used up all of her political capital on the rescues performed to date, and it is far from clear that any more help is politically doable here. The only way that I can see such help coming is under some terms other than drawing upon the savings of Germany’s citizens. Printing, perhaps, but even that is a dicey political proposition here.

If Spain drops here, then you can just set an egg timer for when Italy will go. And then France. The dominoes will rapidly fall from there.


Greek default specter turns material

The weekend Greek revolt against the austerity measures imposed on its economy in return for eurozone funding has elevated the prospect of a Greek default on its debts or a chaotic exit from the eurozone.

The collapse in support for the mainstream parties that had reluctantly accepted the austerity program and the vehement opposition to the measures by the radical left party that finished the runner up in the weekend’s elections has made it almost impossible for a coalition to be formed that would persevere with the program.

It is likely new elections will have to be held next month but given the degree to which Greeks have protested against the harsh eurozone prescriptions – and the 20 per cent shrinkage in GDP and 20 per cent-plus unemployment that has accompanied them – it is improbable that Greece will continue with the reforms it agreed in return for the next $300 billion tranche of eurozone funding.

If it does walk away from that commitment there will be chaos in Greece and, to a lesser extent, elsewhere. Greece would inevitably default on its debts and could be forced to quit the eurozone.

reply to post by sirric

spain has 47 million citizens, circa 30 million have a bank account. the article you posted said 1 billion euros in one week, that would be about 30 euros per bank account per week. why is that a bank run ?

www.abovetopsecret.com...

Why do ALL of the experts,, convienietly ,,
forget or bypass this , Course of Action ?

How they doing?

No big "chaos", or "wild death throws",, resulted from that particular ,,option,,

Just curious why its never considered do-able, elsewhere.
I mean if the # eally is going too hit the fan in other countries,,
would u not want the people to think kindly of the present governence actions,,?
If i was of that Nationality,,
I know i would,, think kindly of said "Plan of Action".
Or they can do the "let them eat cake,,",


History Note,
,for the ,,strange but true people,,
*the guiotines first head of notable lineage,,,
belonged too the guy who made it's most significant improvement !"
I KID U NOT !

Me.

reply to post by icepack



No you missed the real number, This is in 1 bank, not across all the banks.......

"Shares in Bankia, the Spanish bank which was part-nationalized last week, plunged by over a quarter on Thursday morning, after a report that customers had withdrawn €1bn from the bank over the past week."

Here is PBS news coverage on the Greece bank run

reply to post by sirric

The amount of money the report said customers have withdrawn from Bankia, which holds around 10 percent of Spanish deposits, is equivalent to around 1 percent of the lender's retail and corporate deposits.

1% is much i think, i don't really understand economics.

It's been reported here that 14 spanish banks have been down graded.
It will mean that it is harder for these banks to get capital, and remain solvent
which altimately means that they will indeed need a bailout

Originally posted by icepack
reply to post by sirric

 

The amount of money the report said customers have withdrawn from Bankia, which holds around 10 percent of Spanish deposits, is equivalent to around 1 percent of the lender's retail and corporate deposits.

1% is much

i think, i don't really understand economics.

Fractional reserve banking.

A bank doesn't actually hold the money it proclaims to have.

That is why a bank run is so dangerous. If you can imagine that 100 people all go to get their money out at once, only the first ten will actually get their money, the rest doesn't exist. If people knew how their banks are actually run, they would probably never use a bank again.

Exactly, a bank run is bad.
Because it instill fear in people.
For example. If your friend came over and said they withdrew ALL Their money from bank X, but the bank didnt have enough money for the next person.. where does that leave you?

You look in your wallet, maybe a crisp $20.
You look in your car, maybe a 1/4 tank.
You look in your friend, maybe a few days food.

If you go to the bank and they say '' sorry we dont have any $$ left '' your screwed.

which is why a bank run is dangerous, just because a bank says we have X$billion in savings accounts, chances are they have a tiny tiny fraction of that CASH on hand at the bank!

If I were in Spain or Greece, id be going to the bank BEFORE i even wrote a reply on this forum and demanding my money.

Has anyone seen or read the counter arguments coming from MSM that these so called bank runs are little more than some elevated withdrawals and there is no reason to be concerned that banks runs are unfolding. Apparently the amounts being withdrawn are just a neglible amount compared with the deposits these banks have. I wonder if this is just an attempt to instill calm to prevent further account withdrawals?

Spain banking sector shaken by report of bank run
18-05-2012

MADRID (AP) — Confidence in Spain's banks and its teetering economy was shaken Thursday after a newspaper reported that depositors were rushing to withdraw their money from Bankia, a troubled bank that was effectively nationalized just one week ago. Adding to the anxiety, rating agency Moody's downgraded its credit ratings on Spanish banks. The banking sector has been hit hard by a collapse in the Spain's property market and is facing tough funding rules that many analysts fear it can't afford. The nervousness about Spain's banks comes as the eurozone financial crisis intensifies. Political turmoil in Greece has increased the likelihood that it could leave the 17-country monetary union, a move that could have ripple effects throughout Europe and the world's financial markets. Depositors have been pulling their funds out of Greek banks. People fear the country's financial sector might collapse if Greece left the eurozone and that their savings would become worthless if the country started using a substantially devalued new currency, such as the drachma.

Greek bank withdrawals increases......

The Greek financial system is straining hard for cash. Consumers and businesses are making massive withdrawals from Greece's banks -- leading to concern the beleaguered nation could be forced out of the eurozone by a banking crisis even before its government runs out of cash. Deposits are the lifeblood of any bank, and Greeks pulled 800 million euros out of the banking system on Tuesday alone, the most recent day for which figures are available. At the same time, the European Central Bank this week cut back -- at least temporarily -- on how much it was willing to lend to some Greek banks. (Greece downgraded deeper into junk territory) The central bank, whose loans have provided banks with much-needed cash, said it believed the loan freeze would last only a few days until the banks secure already-approved European bailout funds. But the freeze has forced banks to instead borrow from the Greek National Bank -- at higher interest rates.

Greek money on the run

Not getting better, that's for sure.

Sirric

"Meanwhile back in America"

And look at how this crisis is being spun to the ignorant masses Euro crisis: Should I cancel my vacation? . According to CNN, it's not that bad at all. A mere, hiccup.

Come on people, Spaind and Greece aren't the only countries on the brink. You have Ireland, a now sagging Germany, Italy in the financial toilet not to mention what happened to the Dutch government falling out because of budget talks.

We are sitting here watching these people put a band-aid on a broken leg i mean come on it's obvious something is going on. The stipulations these EU and banking heads come up with eventually run that country into the ground so it's evident this is being done on purpose.

Italy for sure will be going down that lonesome road to poverty due only to corruption and fascism.

More talk about the Bank issues in Europe.

Are Bank Runs the Reign In Spain?


News Wrap: Greek Credit Rating Drops Amid Eurozone Doubts


RT talks bank run

Jeez, I didn't here about any of this when I watched last nights propaganda with Brian Williams? I wonder why? I guess I'll have to start watching the propaganda on RT or Al-Jezera.

Originally posted by LittleBlackEagle
Italy for sure will be going down that lonesome road to poverty due only to corruption and fascism.

Corruption? Fascism? Thats sounds familiar...hey! I live in a corrupt,fascist country who poses to be a Republic (which just means "The State")

It could happen in the UK next to Isolated areas like Santander. Santander has been downgraded today and savers are getting jittery here. Santander is one of the bigger banks in the UK too as they bought up Abbey, Alliance and leicester and Bradfod and Bingley and merged them all together. I am glad I don't have a santander account right now.

reply to post by michael1983l


Assuming your from the Uk,,
that guy in the House Of Lord's
,,who said he had proof of a Billions,/ Gold, ? Swindle,,,and everyone said he was a hoax/nut/idiot/etc,,

What more does it take???
And its the Queens 60th Crown Jubilee ,,,,,u think she will uphold tradition and forgive everyone's,,ie To The People's of The British CommonWealth,, I,, Queen of said Commonwealth,,
Her By Proclaim,,,,,


were broke too,, so hey,, have a blast,,,

Thank-You.
God Bless The Queen,,
(just a little humour,, really,,,
ummmm,,
So,,,, hows that Christmas Party Cancellation going?)
sorry,,sorry,, really
just slipped out,,



Me.