ECONOMY

NBG: Fund flight talk ‘way over the top’

Greece’s banking system is in good shape and reports of a flight of funds from Greek banks to lenders abroad are «way over the top,» said Apostolos Tamvakakis, the CEO of National Bank (NBG). The head of NBG, the country’s largest lender, was responding to press reports saying that more than 10 billion euros in deposits have been withdrawn by customers fearing a meltdown due to the debt crisis and transferred to Swiss and Cypriot banks. «You shouldn’t be worried about the Greek banking system, it is in good condition,» he told reporters yesterday, adding that he believes there is ample liquidity in the financial system. The core Tier 1 ratio of Greek banks – a measure of a bank’s financial strength – is above 9 percent, according to Tamvakakis. In Europe, the average stands at around 8 percent. Data released yesterday, however, showed that 8 billion euros have been drained from the country’s banking system over the last five months. The Bank of Greece, the country’s central bank, said total deposits – parked in current and savings accounts as well as time deposits – fell to 229.3 billion euros in February, down from 237.3 billion in September. Bank sources attribute the drop to some customers seeking better returns elsewhere, such as in Greek bonds. Other sources said talk that the government will call on taxpayers to declare bank deposits prompted a run on funds. Figures for February showed deposits were almost unchanged from January. Tamvakakis added that banks are continuing to pump money into the economy, blaming the slowdown in loan growth to slumping demand. Credit growth in February rose by 3.9 percent on an annual basis, picking up from 3.7 percent in January. [email protected]