16 May 2012 by Jim Fickett.
The Financial Times reports:
Athens-based bankers said withdrawals exceeded €1.2bn on Monday and Tuesday – 0.75 per cent of deposits …
A senior Greek banker said the experience of the past few days “gives rise to concern that withdrawals may accelerate”. Another banker said: “We are seeing something very unusual, customers breaking their time deposits in order to withdraw funds.” …
One of the Greek bankers said that since the end of April, deposits had been reduced by some €5bn, including orders to buy foreign bonds and securities. …
The price of Greece’s benchmark international 10-year bond also dipped for a 10th day running, to just 14.4 cents on the euro, as fears mounted that Athens may be forced out of the eurozone.
If this is not turned around within days, there is likely to be a panic and bank failures. The problem is not necessarily the banks per se, but rather that people (rightly) expect a big devaluation in a return to the drachma. So the easy solution, more lending to the banks, will not work. Core Europe is going to have to decide to throw more good rescue money after bad, or Greece is going to have to decide to play by the austerity rules. It's all on the knife edge for now.