Greek ship is sailing towards the Northern Rocks

It is reported today that wealthy Greek depositors are withdrawing their Euros from Greek banks and depositing them offshore with HSBC & SocGen the immediate beneficiaries but the super rich Greeks worried about punitive tax measures are moving their funds to accounts in Switzerland with the Swiss banks. HSBC private banking in London is also reported as picking up a lot of this Greek business.

This is a big problem for the Greek banks because no one else , ie the wholesale money markets, is going to lend them money right now as they are worried the Greeks might go bust. No deposits means no money to lend means economic contraction. Shades of Northern Rock! People just want their money out of Greece because of the economic situation and likely punitive taxes arriving with the IMF.

Meanwhile on the sovereign markets supposedly bailed out by the EU our EU friends are arguing about what interest rate to charge the Greeks for their emergency loans. The Huns want 6% to 6.5% but the others who see they may soon be in the same boat want 4% to 4.5%. That's why the Germans want 6% plus!

This story like the UKIP Agnew Pearson Bannerman tale has legs and will run and run!