IT’S STARTING – Bank Runs Begin In Greece
Fears grow over Greece bank run as country seeks bail-out
By KARL WEST
Greece’s banks are being hammered by a run on their reserves, leaving the country’s main lenders increasingly reliant on the European Central Bank for funding.
The latest figures from the Bank of Greece paint a grim picture, with foreign lenders and individuals withdrawing funds from Greek banks at an alarming rate.
Simon Ward, chief economist at fund manager Henderson, likened the situation to Britain’s Northern Rock, which was eventually nationalised to save it from collapse.
He said: ‘If this run continues, the banking system (in Greece) will need to be bailed out and that will increase the cost of the total bail-out substantially.’
Greece is in the process of securing a £40bn-plus bailout from the International Monetary Fund and fellow eurozone countries to help it through a debt crisis that is threatening to bring down the 16-nation monetary union.