Greece has emerged as an important player in the field of foreign bank deposits, ranking third in Europe. Greek households hold around 7.2 billion euros in foreign banks, second only to Cyprus and Luxembourg in terms of deposits as a percentage of total deposits.
Important points
Greece holds 7.2 billion euros in foreign bank deposits. The country ranks third in Europe after Cyprus and Luxembourg. Greek deposits account for 4.7% of total euro area bank deposits. In terms of absolute value of foreign deposits, Germany ranks first with 52.9 billion euros. Greek banks collect just 0.6% of foreign deposits, the third lowest level in Europe.
Greece’s position in foreign deposits
According to recent data, Greek deposits in foreign banks account for 4.7% of total deposits, putting Greece in a favorable position compared to other European countries. Cyprus ranks first with 9.5%, followed by Luxembourg with 7.5%. In absolute terms, Greece ranks seventh among European countries, with Germany holding the top spot with 52.9 billion euros.
Comparative analysis of foreign deposits
The breakdown of the top countries for foreign bank deposits is as follows:
Ranking Country Foreign deposits (€ billion) 1 Germany 52.9 2 France 15.9 3 Netherlands 15.0 4 Belgium 12.4 5 Spain 10.2 6 Italy 9.9 7 Greece 7.2 8 Cyprus 4.5 9 Estonia 0.275 10 Lithuania 0.371 11 Finland 0.504
Challenges in attracting foreign deposits
Although Greece ranks high in terms of deposits held abroad, it faces challenges in attracting deposits from abroad. Greek banks occupy the third-lowest position in Europe, accounting for only 0.6% of foreign deposits. This is in stark contrast to Luxembourg, which leads the way with 37.3%. The lack of confidence in Greece as a deposit destination stems from past financial crises, including capital controls and deposit haircuts.
Factors affecting deposit liquidity
Several factors influence the movement of deposits across euro area countries. Interest rates play an important role, as many Europeans seek higher savings yields. From mid-2022 to September 2023, there was a noticeable outflow of deposits as individuals sought better opportunities. Additionally, the rise of digital banks has made it easier for depositors to explore options outside their home country.
conclusion
Greece’s third-largest foreign bank deposits highlight Greece’s important role in the European financial landscape. However, the challenges the company faces in attracting foreign deposits highlight the need for continued efforts to restore depositor confidence. As interest rates change and digital banking evolves, the dynamics of deposit mobility will continue to be a key area of focus in the coming years.
