Is A Run On the Bank in Greece Starting?

Bank deposits seem to be falling as people start stuffing their money into mattresses. People were saying that the 2008 meltdown showed that capitalism doesn't work (I don't agree with that as government meddling seemed to really be what caused the crisis), it appears that socialism ain't so hot either:

Business and household deposits at Greek banks fell for a third month in March, bringing total losses in the first quarter to 10.6 billion euros as Greece's debt crisis intensified, central bank data showed on Thursday.

Investors have been closely watching deposits in Greek banks after a cumulative 8.4 billion euro drop in January and February indicated savers' concerns over the safety of deposits.

Compared to the February, deposits were down 0.9 percent to 227.4 billion euros at the end of March, according to the Bank of Greece.

Based on the March data, deposits decreased by 10.6 billion euros, or 4.5 percent, in the first quarter of 2010.

The household and business deposits are prone to large monthly fluctuations. Earlier this month, economists said the large drop in the first two months of the year was not insignificant but no reason to cause serious concern.

"Most of that decrease is probably due to capital flight because of the crisis," said Tania Gold, analyst at UniCredit.

Greek economy minister George Papaconstantinou said on Tuesday that all bank deposits in Greece were safe and the country's lenders enjoyed secure funding from the European Central Bank.

The European Central Bank data showed deposit liabilities at Greek commercial banks rose, but includes other funds, such as government deposits.

Greece's debt crisis has led to a joint, multi-billion euro plan by European Union officials and the International Monetary Fund to bail out the cash-strapped country.
"The deposit reduction could stop after a EU/IMF bailout agreement is reached," Gold said. "But if its conditions are too tough and markets believe that Greece can not implement them, it could continue."