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How To Monitor The Deposits Of The Eurozone

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.

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).

Chart 2: ECB Lending to Banks

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