Radu Gheţea: The Greek banks in Romania are solid

• The ECB: Financing to the Greek bank, temporarily put on hold

Romanian banks in which the Greek shareholders have a controlling interest are solid institutions, Radu Graţian Gheţea, chairman of the Romanian Banking Association said yesterday: "I could see that first hand, by working with the Romanian banks with Greek shareholders".

Cristian Ionescu, the head of Coface România, considers that the high interest rates paid to depositors by the branches of the Greek banks present in our banking system, show that these institutions are trying to attract the Romanians' savings, since they are no longer receiving funding from Greece, but high interest also means a high risk. Doru Lionăchescu, the president of "Capital Partners", considers that the high interest rates on deposits mean could mean that the banks are faced with major money outflows.

On the withdrawals from Greek banks, Doru Lionăchescu said that this simply shows that customers are worried, rather than panicking. He said that panic is when there are limits placed on the amounts of money that can be withdrawn, means trucks loaded with money coming in to supply the banks, lines and rioting, which is not the case of Greece. "Banks need to have cash reserves and a proactive attitude", according to Doru Lionăchescu.

Cristian Ionescu also said that the panic among the customers, who have withdrawn their money from Greek banks, is irrational. In his opinion, if Greece were to actually collapse, we would also be directly affected through the domestic banking channels.

• The ECB is not willing to increase its exposure to Greek banks, before it sees a commitment to implement the policies which are needed

The European Central Bank (ECB) yesterday officially confimed that it has temporarily halted the financing to some Greek banks, to limit the assumed risks, according to Mario Draghi, the president of the ECB, who said he would not compromise the principles of the institution in order to keep Greece in the Eurozone. Providing funding to some of the lending institutions will be the responsibility of the Central Bank of Greece, until they consolidate their capital.

The halting of the funding by the ECB of the Greek banks comes on the back of the difficult political situation in Greece, considers Cristian Ionescu, the head of Coface Romania. He explained that the ECB is not willing to increase its exposure to the Greek banks, before its sees a commitment to implement the required policies. Most likely, things will become clear after the elections, if the votes will allow the creation of a government coalition, according to Cristian Ionescu.

The head of Coface Romania said: "It is a difficult situation. No one will give money to Greece if the politicians don't create a coalition. Still, Germany and France can't kick Greece out of the Eurozone because they would be affected themselves".

Thomas Costerg, economist at Standard Chartered Bank, London, claims that if so far the exit of Greece from the Eurozone was considered absurd, it is gradually becoming the base scenario. The ECB is placing its own financial situation above the geography of the monetary union, according to him.

Arnaud Poutier, deputy general manager at IG Markets France, said for Reuters, that the entire Greek banking system is in danger, because the banks are facing the biggest problem, namely the withdrawals of money from the deposits. This situation began at least two years ago and has only gotten more pervasive as the crisis escalated.

• Spain denies the withdrawals from Bankia

The Greeks weren't the only ones to withdraw their money from banks. Spaniards also followed their example, as the customers of Bankia (the fourth largest Spanish bank) pulled from their accounts one billion Euros over the last week, according to information from the Spanish publication "El Mundo." Following the announcement, the shares of Bankia yesterday fell more than 10% on the Madrid Stock Exchange, to 1.49 Euros.

Fernando Jimenez Latorre, secretary in the Ministry of the Economy of Spain, denied the information published in the Spanish press. He said yesterday, that there has been no massive withdrawal from Bankia.

"It is not true that at the current time there has been a withdrawal from the deposits of Bankia", the Spanish official said.

Bankia has been nationalized by the Spanish state, last week, in order to eliminate te fears that the lender might collapse because of the losses generated by the crash of the real estate market which appeared in 2008. According to the agreement, the 4.5 billion Euros (5.9 billion dollars) received by Bankia from the Spanish state in 2010 and 2011 will be converted into shares of the bank.

• Last year, bank deposits toured all of Europe

Last year, the savings of customers stored in bank deposits "migrated" all over Europe, according to a study based on data from over 120 European banks listed on the stock exchanges, according to Reuters.

Over 120 billion Euros were withdrawn from two Belgian banks, including Dexia, which had to be bailed out and restructured. Also, KBC saw massive outflows of deposits.

Approximately 90 billion Euros were withdrawn from French banks, including almost 30 billion dollars from Credit Agricole and BNP Paribas. Last year, French banks also suffered due to their heavy exposure to Greece and of liquidity concerns, which forced them to speed up their plans to downsize their networks.

Another 30 billion Euros were withdrawn from the Italian banks.

On the other hand, UK banks were flooded with cash inflows. Over 140 billion Euros were deposited in four major lenders. The United Kingdom benefits from the fact that it is not in the Eurozone, and HSBC and Standard Chartered, focused on Asia, are considered as safe haven institutions.

Banks which could be faced with cash inflows include Barclays, Deutsche Bank of Germany, Credit Suisse and UBS of Switzerland, Sberbank and VTB of Russia.