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Albert Sung is the author of the Katchum Macro-Economic Blog, monitoring breaking economic news from a day to day basis. He started investing in 2008 because of the economic crisis and holds a masters degree in chemical engineering. Previously, he worked several years as a process engineer at... More
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  • How To Monitor The Deposits Of The Eurozone 0 comments
    Mar 21, 2013 1:57 PM

    Now that everyone is scared of the bank runs, it is necessary to monitor the deposits at the peripheral countries.

    The data is available at the ECB site:

    I compiled the data for the most important countries to watch, namely, the PIIGS. And of course Cyprus.

    (click to enlarge)

    Chart 1: Total Deposits of Peripheral Eurozone Countries

    If Cyprus falls, let's see what will happen to the PIIGS. Probably they will fall too.

    I will give a monthly update on this.

    I challenge you: do you see a correlation here between deposits and something else?

    Yes, it's the ECB's LTRO lending to banks (Chart 2). The country that gets the most LTRO will have the most deposits on their banks. That's because most of the deposits just stay on the balance sheets of the banks. Normally loans should go up, but that's not the case anymore since 2008. The deposit to loan ratio is going up (Chart 3).

    (click to enlarge)

    Chart 2: ECB Lending to Banks

    (click to enlarge)

    Chart 3: Deposit to Loan Ratio U.S. Banks

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