Greek households hold deposits of 7.2 billion euros in foreign banks, which ranks our country in third place – after Cyprus and Luxembourg – in the pan-European ranking of countries with the highest deposits abroad as a percentage of total deposits.
According to the data presented in an article on the ECB blog by the bank executive Matthias Rumpf, Greek deposits in other Eurozone banks represent 4.7% of total deposits, compared to 9.5% for Cyprus and 7.5 % for Luxembourg.
In absolute terms, Greece ranks seventh, while the champion of foreign deposits is Germany (52.9 billion). It is followed by France (15.9 billion), the Netherlands (15 billion), Belgium (12.4 billion), Spain (10.2 billion) and Italy (9.9 billion). The lowest position is occupied by Estonia with foreign deposits of only 275.6 million euros, Lithuania with 371 billion and Finland with 504 million euros.
In terms of attracting foreign deposits, on the contrary, Greek banks occupy the third lowest position (0.6%), after Slovenia and Ireland. First in this ranking is Luxembourg with a percentage of 37.3% – a fact that is consistent with the country’s profile as a destination for attracting funds and a tax haven in the past – followed by Estonia (20.2%) and Lithuania (15 .5%). Cyprus is in sixth place with incoming deposits of 4.5 billion euros.
What factors determine the movement of deposits
It is worth mentioning that both Greece and Cyprus suffered a serious blow to their credibility as deposit “destinations” during the financial crisis, following the capital controls in Greece and the haircut of deposits in Cyprus which affected the confidence of the European depositors.
Moreover, the mobility of deposits between Eurozone states is limited anyway – although there are some signs of recovery in cross-border deposits lately.
According to Rumpf, European depositors held 151 billion euros in foreign banks in 2023 – but within the Eurozone, an amount representing 1.6% of total deposits. “Although small as a percentage, it represents a significant increase from the levels of 95 billion euros in early 2020 (1.2%), with the rapid upward trend starting in late 2021.”
Regarding the factors affecting the mobility of deposits, interest rates are one of the main ones, he said.
More specifically, he said that in the period from mid-2022 to September 2023 a strong “export” of deposits was recorded as Europeans appeared to be looking for high-yielding opportunities for their deposits. In addition to interest rates, of course, other factors play a role, such as the dynamic marketing of digital banks with the aim of attracting depositors from abroad.
