Private-Sector Deposits in Spanish Banks Decreased in April

Non-financial companies and households withdrew 31.5 billion euros ($39 billion) from Spanish banks in April, as the government tried to restore confidence in the country’s banking system.

Private-sector deposits fell by 1.9 percent to 1.63 trillion euros in April, reversing a rise of 3.1 billion euros in the previous month, according to European Central Bank data released today. Deposits by companies and households in Spanish banks were down 103.8 billion euros from a year earlier.

Spain, the euro area’s fourth-largest economy, is trying to clean up its banks, plug holes in regional budgets and lift the economy out of a recession. While Prime Minister Mariano Rajoy ruled out a European rescue of Spain’s banks on May 28, the European Commission called today for direct euro-area aid for troubled lenders, a Europe-wide deposit-guarantee system and common bond issuance.

ECB data also showed that there was no sign of deposit flight in Greece. Private-sector deposits in Greek banks rose by 400 million euros to 171.5 billion euros in April.

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