The Spanish government have denied a newspaper report today that customers had withdrawn more than €1 billion euros from the partly nationalised lender Bankia over the past week.
Bankia itself said that deposit activity was normal but the government's denial helped its shares to recoup some of their heavy losses which had accelerated today.
Economy Secretary Fernando Jimenez Latorre denied a deposit flight was underway.
"It's not true that there is an exit of deposits at this moment from Bankia," Latorre, a senior official who reports to the economy minister, told a news conference.
Concerns about the general state of Spanish banks, many of which have suffered heavy loan losses since a property market crash began in 2008 and may have to write off more bad loans, have upset financial markets.
Some market watchers believe a large injection of public funds to recapitalise the banking system and flush out the real estate losses may force Spain to seek an international bailout.
Bankia tried to reassure its customers. "Bankia's operations have been within their usual parameters at the branch network over the past few weeks," it said in a statement. "The trend in activity shows deposit balances will not register substantial changes in the next few days."
"Bankia depositors can be absolutely certain about the security of their savings that they have entrusted with the bank," it quoted newly-appointed Chairman Jose Ignacio Goirigolzarri as saying in an internal note.
Shares in Bankia slumped as much as 30% today, compounding a week of falls, as small investors who had participated in a July stock market listing sold their holdings which have lost nearly two-thirds their value since the flotation.
After Mr Latorre's comment the shares recovered some ground to trade down 13.3% at 1.44 euros.
El Mundo newspaper reported that Goirigolzarri had told a board meeting on Wednesday about the flow of funds from the bank. Citing information from the meeting, it said that the €1 billion were equivalent to about 1% of retail and corporate deposits at the bank.
The government took over Spain's fourth largest bank last week in an attempt to dispel fears that Bankia could not handle huge losses caused by a property crash which began in 2008.
There was no sign of any abnormal activity at Bankia branches in Madrid today.
A few clients told Reuters that they had checked in with their branch manager regarding their deposits, but most said they were not moving them.
"I've got two accounts in Bankia and up to now I haven't shut them. I'm not even considering it," said Jose Ignacio Gonzalez, 42. "It has to be safer with state backing. It's got a guarantee."
A government spokeswoman said the bidding process to select an external auditor to value real estate assets across the banking sector was still open and denied that Oliver Wyman and BlackRock had been chosen, as sources previously had told Reuters. "We are at the stage of receiving pitches," she said today.
Bank savings exodus in other countries
Greek savers may be gripped by a "great fear that could develop into panic" in the words of President Karolos Papoulias, but many Greeks shifted their money to safer havens in Britain, Switzerland, Germany and Nordic countries long ago.
Worries about a run on Greek banks has rattled Athens this week, after savers withdrew at least €700 million on Monday alone, according to minutes of Papoulias's comments to political leaders posted on the presidency's website.
It is not only Greeks who are worried about their savings.
Data shows depositors have also taken flight from banks in Belgium, France and Italy.
And on Thursday, Spain's Bankia was reported to have seen more than €1 billion drained by its customers in the past week.
Greeks are afraid they could be hit by rapid devaluation if the country leaves the European single currency, while customers at Bankia have been rattled by the government's takeover of the recently floated bank on May 9 and growing uncertainty about the final cost of Spain's banking reforms.
In Greece, sources at two banks told Reuters that withdrawals on Tuesday had taken place at about the same rate as on Monday.
"The entire Greek banking system is in danger: the banks are now facing the worst of all outcomes, deposit flight," said Arnaud Poutier, deputy CEO of IG Markets France.
That flight started at least two years ago, as the debt crisis grew more serious.
Greece's banks have lost €72 billion in deposits since the start of 2010, or about 30%, according to data compiled by Thomson Reuters.
Five of Greece's top banks saw €37 billion taken out last year, including 12 billion from EFG Eurobank and 8-9 billion apiece at National Bank of Greece, Piraeus and Alpha Bank.
In February, Evangelos Venizelos, finance minister at the time, said only €16 billion had gone abroad, with a third of that going to Britain.
Savers have shifted to property, gold and other banks, or stashed it privately.
In Greece, this slow-speed run on deposits has not caused panic. But that could quickly change if there is a sudden loss of confidence in the banks.
Savers lost faith in Britain's Northern Rock overnight in September 2008, queueing for hours in the days that followed to take out their cash, despite a guarantee safeguarding most deposits.
The British government ended up nationalising the bank.
Deposits shifted around Europe dramatically last year, analysis of data from more than 120 listed European banks show.
More than €120 billion was taken from two banks in Belgium alone, including an exodus of customer deposits from Dexia which had to be bailed out and restructured.
KBC also saw a big outflow.
Some €90 billion was taken from France's banks, including around 30 billion each from Credit Agricole and BNP Paribas.
French banks were hit last year by their heavy exposure to Greece and concerns about their liquidity that forced them to accelerate plans to shrink.
Worries the euro zone crisis would spread also saw about €30 billion in deposits leave Italian banks, although inflows to BBVA helped limit the net outflow from Spain.
Cash flooded into Britain; more than €140 billion was deposited in four big banks alone.
The UK benefits from its position outside the euro zone and its Asia-focused banks HSBC and Standard Chartered are seen as particular safe-havens.
Other banks to see big inflows included Barclays, Germany's Deutsche Bank, Switzerland's Credit Suisse and UBS and Russia's Sberbank and VTB.