Europe bank run is under way

It used to be that you knew a bank run was under way when you saw crowds outside a bank trying to get in and get their money. This is another thing that online banking seems to have gotten rid of. Despite the lack of crowds, many analysts believe what had been a "jog" by big European investors (with the exception of Germany) is now a sprint.

On Monday Gavyn Davies, who chairs Fulcrum Asset Management and is an adviser to the British government, wrote in the Financial Times:

A bank run is now happening within the eurozone. So far it has been relatively slow and prolonged, but it is a run nonetheless. And last week, it showed signs of accelerating sharply, in a way which demands an urgent response from policy-makers.

This was followed on Tuesday by a report from Citi analyst Matt King who applied Greece, Ireland, and Portugal's documented withdrawal rates and applied them to Spain and Italy:

In Greece, Ireland, and Portugal, foreign deposits have fallen by an average of 52 percent, and foreign government bond holdings by an average of 33 percent, from their peaks. The same move in Spain and Italy, taking into account the fall that has taken place already, would imply a further $272.17 billion and $270.9 billion in capital flight respectively, skewed towards deposits in the case of Spain and towards government bonds in the case of Italy....Economic deterioration, ratings downgrades and especially a Greek exit would almost certainly significantly accelerate the timescale and increase the amounts of these outflows.