FRANKFURT Aug 28 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
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.