May 17th, 2012
07:04 AM GMT
(CNN) – Global investors inhaled deeply when Greek President Karolos Papoulias relayed a difficult call with the head of the nation’s central bank - since Monday, Greeks pulled around 800 million euros (around $1 billion) out of the nation’s banks.
"There is, of course, no panic, but there is fear that could develop into panic," Papoulias said, describing what Central Bank Governor George Provopoulos told him. "He also said that the strength of banks is very weak at the moment."
So how much money is in the Greek banking system? About 170 billion euros (more than $216 billion) at the end of March, according to the Financial Times.
Since 2009, about 25% to 30% of Greek deposits have left the country. That’s not good for Greece, but given the turmoil of the past two years, it certainly could be worse.
Feeding the flight of Greek euros is the fear is that if Athens reintroduces the old currency, the drachma, the worth of domestic cash will almost certainly crater – better to park them abroad and see what happens.
But was this a bank run? Marketplace’s Kai Ryssdal provided this “reality check” by calling folks in Greece to check out the lines at banks.
“Right now I'm in the streets near the central square in my neighborhood where there are six different banks and I just went and checked all of them because there was this rumor that people are rushing to the banks to take their money and that there was no money left in the ATMs,” said Theodora Oikonomides, an unemployed aid worker. “Of the six banks, all (have) cash. There's a total of nine ATMs and there were less than one customer per ATM when I got there.”
For the past three years, euros have ambled out of Greek banks. The outflow of euros this week didn’t break into a run - more like a jog. But if it becomes clear that Greece is leaving the eurozone, it’s hard to imagine a scenario that doesn’t end up with lines forming outside of Greek banks.
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