Rising bank deposits evidence of increased confidence in Greek economy

An expanding deposit base in Greek banks shows increased confidence in the Greek economy and the banking system, bank officials said on Monday.

In the period from May to December 2017, private sector deposits in Greek banks totaled 7.4 billion euros, with 4.8 billion coming from Greek households, of which 50 pct was kept outside the banking system previously.

Another characteristic of this improving climate is a rise of “new money”, new deposits not subject to capital controls. The new money is estimated at around 30 billion euros, from a total of 126 billion euros in private sector deposits and comes mainly from households, investment products, money from abroad and largely to deposits by commercial enterprises. This new money has doubled compared with a year earlier, evidence that normality returns to the Greek economy. Bank officials expect conditions to accelerate the rate of deposit return in the banking system as the economy would continue growing and the country was about the complete a bailout programme. The same officials said they expected new money deposits to reach between 7-15 billion euros this year.