FRANKFURT, Aug 28 (Reuters) - Moves by consumers and firms to pull their money out of Spanish banks gathered pace in July, with private sector deposits falling at a record rate as the country bore the brunt of the euro zone’s debt crisis.
Private deposits fell by almost 5 percent to 1.509 trillion euros, the European Central Bank data showed on Tuesday, in the biggest monthly drop since the statistical series began in 1997.
In Madrid, Spain’s central bank played down the drop, saying it was mainly due to the holiday season.
“In July, deposits tend to fall due to seasonal factors because families take out money for their summer vacation and businesses have to pay taxes,” a Bank of Spain spokesman said.
In July 2011, deposits fell 1.5 percent, while a year before that they rose 1.3 percent, suggesting some of last month’s far sharper fall could be due to capital flight.
Falls in bank deposits are common during recessions as consumers uses their savings after their income drops. Spain, where virtually a quarter of the workforce is unemployed, re-entered an economic slump in the first quarter.
In a more positive development further east, Greek banks stopped bleeding deposits in July after June elections eased fears of the country might quit the common currency bloc.
Speculation about Greece possibly quitting the euro was intense in May when anti-bailout parties gave a strong showing in parliamentary elections, but the Greek central bank said the process had reversed after the elections.
The ECB’s deposit data for July confirmed this. Private-sector deposits in Greek banks rose about 2 percent, after a fall of almost 5 percent in the previous month.
The total rose to 159.4 billion euros at end-July from 156.2 billion a month earlier, but is still one-third below the peak of December 2009.
Deposits rose by 1 percent in Ireland and were little changed in Portugal and Italy.
Monthly fluctuations in the figures are common, though sharp consecutive drops in countries with stable banking systems are unusual.
The ECB data, which are for all currencies combined, are not seasonally adjusted and differ slightly from national central bank figures. The measure excludes deposits from central government and financial institutions.