- Spanish Bank Deposit Outflow Surge Continues In August!
by Tyler Durden, www.zerohedge.com
The crux of the “pain for Spain” was exposed in August, when the world learned that despite all attempts to the contrary, Spanish banks are no longer perceived as safe by the locals, and the result was a record 5% deposit outflow in one month from local banks: cash that was promptly redeposited elsewhere in the Eurozone. And as money flow theorists know all too well, if cash is exiting the Spanish banking system – i.e., if the confidence is just not there, not only is growth impossible, not only are any austerity plans or otherwise to push GDP higher futile, but all attempts to save the local banking system – which is now reliant on the ECB for funding to the tune of a record €412 billion, and which means the country has already been bailed out by the ECB – are futile and merely sunk, literally, costs. In short: the deposit outflows continued, and while not at the record July 5% pace, a whopping €17 billion, or 1.1% of total, deposits left the country for good and is unlikely to come back.
Consumers and firms continued to pull their money out of Spanish banks in August but at a slower speed than in July, with private sector deposits falling slightly more than 1 percent as Spain was sucked into the centre of the euro zone debt crisis.
Private-sector deposits at Spanish banks fell to 1.492 trillion euros at end-August from 1.509 trillion euros in the previous month, hitting their lowest point since April 2008.
Which also means that if the continued Spanish government cash decline persisted into August after plunging from March to July (as we reported before), then at this point not even a long-overdue bailout request by Rajoy will do anything more than push up Spanish bonds for a week or two before the Spanish house of cards finally comes tumbling down.