Yiagos Alexopoulos at Credit Suisse estimates that Spanish capital outflows are currently running at an annualised rate of 50 per cent of GDP.
Here is more, including a scary picture.
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I have a question. Many depositors in Spain are simply withdrawing from Spanish banks and depositing their funds in branches in other European nations. That is, removing a deposit from a Deutsche Bank branch in Madrid and re-depositing it in a Deutsche Bank in Berlin. Two questions, actually: (1) of the total volume of the runs, I wonder how much this kind of behavior makes up, and (2) given inter-branch support, is the problem of runs on the bank really that bad, in this light?
Assuming the premise that this is really happening, it must be bad. If it made no difference, no one would be doing it.
Its bad for spain, not bad for the bank.
It’s presumably bad for Spain because it’s bad for the banks.
Another question: Is this the opposite of the capital flow bonanza that got Spain and others into such trouble before? Will this have an effect on the German economy, especially considering that interest rates are so low.
Yes, I now think increasingly.
The estimate is obviously wrong. I suspect they’ve forgotten to purge out the valuation adjustment somewhere from the stock measures.
LOL! Indeed. And every Friday, my daily annualized cash flow is 7 times greater than my daili-ized annual cash flow. What’s the flow period!!??!
“A scary picture”? You are admired for a reason, professor.
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