ATHENS--Wealthy Greeks are pulling their money out of local banks and sending it abroad, fearing increased government scrutiny on assets and a run on the banks if Athens is forced to turn to the International Monetary Fund, according to private bankers and other people with knowledge of the situation.Greece and the US are wildly different in size, so I tried a crude comparison to bring these numbers to US sizes by using the two nations' GDP ratio from the World Fact Book. I came up with an equivalent flight from US banks to the tune of roughly $330B. That means Americans would be withdrawing $330B from B of A, Wells Fargo and so forth and sending it off to banks in Japan, France and Germany. The articles claim the Greeks are afraid of a run on their banks. I'd suggest that this is a run on their banks.
"There is a lot of uncertainty out there," said a senior private banker at a Greek bank. "We've had a number of customers asking to move funds out of Greece, mostly to Cyprus, Luxembourg and Switzerland." ...
"We estimate that €8 billion has moved out of Greece to accounts abroad since December. It's money from bank accounts, stock sales, property sales and other sources," he said, adding that that represented a substantial chunk of the €30 billion under management in Greek's private banks.
Lastly, that article, which I'm afraid is only available to subscribers, goes on to detail how the Greek government is planning on taxing savings by levying a 5% tax on all bank deposits. There's quite a bit more taxing planned, but that's one of the major reasons smart money is leaving the country. By using the Euro, the Greek government has made this even easier as the investors pay no conversion penalty for moving their money. In the old days when they had the drachma, by now the drachma would be practically worthless and the investors would have been killed exchanging them for, say, deutschmarks.
Yesterday, I linked to an article where a Greek union boss said this, "People on the street will send a strong message to the government but mainly to the European Union, the markets and our partners in Europe that people and their needs must be above the demands of markets." That is precisely what Greece has been doing for a long time. The result is a wrecked economy and an unstable banking system. The "people" are now finding out that their needs can't be met by governments waving magic wands.