Money leaking to Germany

As the European mess situation has been unfolding, people have moved cash out of the imploding Med countries into the stable German banking system. From Bloomberg;

Money is leaking out of banks in southern Europe as customers scoop deposits out of Greece, Spain and Italy to move cash to less indebted nations such as Germany.

Greece (TODETOGR)’s total deposits plunged 28 percent from the peak in June 2009 to 169 billion euros ($225 billion) at the end of December, according to data compiled by Bloomberg. In Spain (TODETOES), deposits slid 5 percent in the five months through November to 934 billion euros, the least since April 2008. Italian (TODETOIT) banks held 974 billion euros in November, the lowest in 18 months.

“The biggest systemic risk is if people lose confidence in keeping their euros in Spain, Portugal or Italy,” Perkins said. “It makes sense to put your cash into Germany just to be safe and that’s where the real systemic danger lies. That contagion isn’t priced in, and bank deposits are the place we’d spot it.” (Full reading here).