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Greek bank deposit outflows rose to €3 billion last week- JP Morgan

Greek banks on track to run out of collateral for new loans in eight weeks, says JP Morgan
Greek banks on track to run out of collateral for new loans in eight weeks, says JP Morgan

Deposit outflows from Greece's banks rose last week to around €3 billion, according to JP Morgan estimates.

The increase came ahead of Friday's last-minute aid extension agreement with the country's euro zone creditors. 

The 50% increase in the pace of outflows from the previous week's €2 billion meant Greek banks were on track to run out of collateral for new loans in eight weeks as opposed to 14 the week before, JP Morgan said. 

This is based on its calculation that of a maximum €108 billion of financing available from the European Central Bank and Greek central bank, Greek banks have already used up €85 billion, leaving them with €23 billion if needed. 

Hard data on Greek bank deposit flows come with a long time lag, meaning estimates are the most up-to-date guides.

Outflows apparently accelerated during last week. They totalled more than €1 billion over Wednesday and Thursday, three senior banking sources told Reuters on Friday, and about €1 billion on Friday alone, another senior banker said. 

Greece is discussing a list of reforms including measures to tackle tax evasion and corruption with international partners to ensure it is accepted. Approval will secure the financial lifeline outlined on Friday. 

Total bank deposit outflows this year, which JP Morgan estimates by using a proxy of Greek demand for money market funds overseas, stand at around €25 billion - equivalent to more than €3 billion a week. 

Outflows rose in the run-up to the January 25 election that brought the current government into office, dipping thereafter before rising again as the deadline for a debt deal neared.