Greece Commercial Banking Report Q3 2012 - New Study Released

Fast Market Research recommends "Greece Commercial Banking Report Q3 2012" from Business Monitor International, now available

by Bill Thompson

(WireNews+Co) - Boston, MA - 18 October 2012

Banking sector has been left severely weakened. Uncertainty over whether Greece will default on the national debt and even leave the currency union altogether have underpinned a silent run on domestic banks.

Indeed, around EUR60bn in corporate and retail deposits have been withdrawn over the past two years. It is likely that the majority of this deposit withdrawal has shown up in Germany where inflows to the banking sector have climbed over 40% in the past three years. As long as concerns persist of a disorderly default, deposit outflows from the banking system are likely to Greece Commercial Banking Report Q2 2012 © Business Monitor International Ltd Page 27 continue.

Although an agreement has been reached with Greece' private creditors to restructure the national debt, upcoming parliamentary elections will ensure near-term uncertainty persists. The potential for a new coalition to be formed after the ballot which has less appetite for additional austerity could be the spur for more outflows. Assuming a broadly accommodative coalition comes to power which will continue to toe the troika line then the pace of deposit withdrawal is likely to slow. Greece's commitment to the conditions set out in the bailout programme is key for the stability of the banking system.

Given that many of Greece's struggling banks are likely to be surviving only as a result of their addiction to the ECB's liquidity provisions, a disorderly default would otherwise shut off the one form of cheap funding available for domestic banks. For the time being we still believe that Greece will stay inside the eurozone with further punishing austerity ahead.

In line with fiscal retrenchment which will drive the economy further into depression, we forecast the banking sector to contract by 4.5% in 2012 (revised down from 2.0% previously) and 2.0% in 2013. We continue to warn, however, that unless Greece's creditors switch towards growth strategies and away from blunt austerity, Greece would be pushed inexorably towards default and exit from the eurozone.

Fast Market Research (http://www.fastmr.com) is an online aggregator and distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff will help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.