By Steve Slater and George Georgiopoulos Reuters Greek savers may be gripped by a “great fear that could develop into panic” in the words of President Karolos Papoulias, but many Greeks shifted their money to safer havens in Britain, Switzerland, Germany and Nordic countries long ago. Worries about a run on Greek banks have rattled Athens this week, after savers withdrew at least 700 million euros on Monday alone, according to minutes of Papoulias's comments to political leaders posted on the presidency's website. It is not only Greeks who are worried about their savings. Data shows depositors have also taken flight from banks in Belgium, France and Italy. And on Thursday, Spain's Bankia was reported to have seen more than 1 billion euros drained by its customers in the past week. Greeks are afraid they could be hit by rapid devaluation if the country leaves the European single currency, while customers at Bankia have been rattled by the government's takeover of the recently floated bank on May 9 and growing uncertainty about the final cost of Spain's banking reforms. In Greece, sources at two banks told Reuters that withdrawals on Tuesday had taken place at about the same rate as on Monday. “The entire Greek banking system is in danger: the banks are now facing the worst of all outcomes, deposit flight,” said Arnaud Poutier, deputy CEO of IG Markets France. That flight started at least two years ago, as the debt crisis grew more serious. Greece's banks have lost 72 billion euros in deposits since the start of 2010, or about 30 percent, according to data compiled by Thomson Reuters. Five of Greece's top banks saw 37 billion euros taken out last year, including 12 billion from EFG Eurobank and 8-9 billion apiece at National Bank of Greece, Piraeus and Alpha Bank. In February, Evangelos Venizelos, finance minister at the time, said only 16 billion euros had gone abroad, with a third of that going to Britain. Savers have shifted to property, gold and other banks, or stashed it privately. In Greece, this slow-speed run on deposits has not caused panic. But that could quickly change if there is a sudden loss of confidence in the banks. Savers lost faith in Britain's Northern Rock overnight in September 2008, queueing for hours in the days that followed to take out their cash, despite a guarantee safeguarding most deposits. The British government ended up nationalizing the bank. “It (Greek withdrawals) is not a huge number in percentage terms, but it is still a very worrying story. But deposit flight has been going on for two years. What we are seeing in the euro zone is a slow-motion bank run,” said Michael Riddell, fund manager at M&G International Sovereign Bond Fund. Deposits shifted around Europe dramatically last year, analysis of data from more than 120 listed European banks show. Two Belgian banks, bailed out Dexia and restructured KBC saw their deposits fall by 120 billion euros. The bulk of the change resulted from the Belgian state's nationalization of Dexia's Belgian banking business, but retail customers pulled out 7 billion euros from Dexia around the time of its break-up in October 2011. KBC also sold a banking subsidiary, Centea, leading to reduced deposits, but the majority of its shortfall came from withdrawals by US institutions of money market funds. The Worldscope data includes the value of money held by the bank or financial company on behalf of its customers, including demand, savings, money market deposits, negotiable debt securities - certificates of deposit, along with foreign office and deposit accounts. Securities sold to customers under repurchase agreements are excluded. Based on these criteria, some 184 billion euros was taken from France's biggest listed banks, including around 33 billion from Credit Agricole and 82 billion euros from BNP Paribas. The reduction in deposits at BNP Paribas was largely due to the withdrawal of US money market funds. The bank actually experienced a 15 billion euro increase in retail deposits within its European domestic network during the period, driven by growth in its two biggest markets, France and Belgium. __
