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House­hold depos­its fell by €20.6bn in Eurozone.

Eurozone
The fall in euro­zone bank depos­its, which star­ted a few months after the ECB began rais­ing rates last sum­mer, marks a reversal from the money that had been pour­ing into banks, par­tic­u­larly since the pan­demic star­ted. In Feb­ru­ary, the decline accel­er­ated as depos­it­ors cut their hold­ings at euro­zone banks by €71.4bn, the biggest reduc­tion since records began in 1997. House­hold depos­its fell by €20.6bn, the most significant fall since that data star­ted to be col­lec­ted in 2003. The with­draw­als in the five months since Octo­ber amoun­ted to 1.5 per cent of the almost €14tn euro­zone banks held for depos­it­ors and were less than the $500bn of depos­its that have been pulled out of US banks in the past year.

In the UK, there have been sim­ilar out­flows of depos­its by cor­por­ate cus­tom­ers, which with­drew £20.3bn from banks and build­ing soci­et­ies in Janu­ary, a record since this data began in 2009, accord­ing to Bank of Eng­land fig­ures. However, UK house­hold depos­its con­tin­ued to grow by £3.5bn. Banks in the euro­zone have been slow to pass on higher interest rates to depos­it­ors. The ECB raised its deposit rate to 3 per cent this month, but the highest instant access rate for savers at Ger­man banks is 1.6 per cent, accord­ing to deposit broker Raisin.

Overnight depos­its at euro­zone banks fell €140bn in Feb­ru­ary, tak­ing the decline over the past six months to €512bn. However, this was par­tially off­set by an increase in depos­its with an agreed matur­ity up to two years, which rose by €83bn in Feb­ru­ary and by €476.3bn in the past six months. Total lend­ing by banks to euro­zone cus­tom­ers fell for the third straight month in Feb­ru­ary, tak­ing the total three-month decline to €72bn and end­ing nearly five years of steady growth. Eco­nom­ists say this month’s bank tur­moil is likely to make lenders more cau­tious, squeez­ing credit sup­ply.

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