Moody's on Monday said declining bank deposits in Greece, which at last tally stand at 119.7 billion euros, is a negative development. The international ratings agency said declining deposits undermine Greece's domestic banks and their efforts to reduce dependence on the Eurozone inter-banking lending system.
Moody's said an increase in deposits in Greece's crisis-battered banks, which still operate within a capital controls framework, is of vital importance for their long-term borrowing needs. Any increase in the Emergency Liquidity Assistance (ELA) as a result of fleeing deposits will increase borrowing costs for banks and restrict their profitability, the firm said.
