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Deposits in Greek Banks Rise Over Past Two Weeks

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The Greek banking system could be slowly regaining some pace.
Bloomberg reported on Tuesday that since Greek banks reopened on July 20, customers have deposited 1 billion euros in the country’s banks.
The news agency cited an anonymous senior official at the Bank of Greece who also said that the European Central Bank will conduct a stress test on Greek banks as well as a check on their books to assess their standing and needs.
More than five weeks of capital controls in Greece have been severely damaging to the economy. On a dark Monday, the Athens Stock Exchange opened after five weeks, recording the lowest levels since 1987, Greece’s manufacturing sector indicated a severe decline in July and 9 in 10 Greek firms said they lost revenue because of the restrictions on the economy.
Deposits had been draining from Greek banks at an alarming rate prior to the capital controls and bank closures. In June 2015, depositors withdrew 8 billion euros from Greek banks sinking deposits to 127.5 billion euros. Reuters had found that to be the lowest level in Greek bank deposits since 2003.
Despite this downturn, Bloomberg notes that analysts are confident that the 25 billion euros international creditors have guaranteed to give to Greek banks by mid-December, if a third bailout deal with Greece is finalized, are enough to recapitalize the banking system. The same Bank of Greece official noted that depositors will not have to participate in this recapitalization process.
 

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