Another crisis, another insidious bout of capital flight. In Greece today, as in Cyprus three years ago, depositors are withdrawing bundles of euro notes to be spirited out of the country. Most of all, investors are rushing to make electronic transfers to banks elsewhere in the eurozone. In December 2014 alone, 7.6bn were sent abroad, equivalent to about 4 per cent of Greeces economic output.
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http://www.ft.com/cms/s/0/607c4bd4-b5e9-11e4-a577-00144feab7de.html#ixzz3S0aqWrE8In 2012, Cyprus was in a similar bind. Wealthy Cypriots (and foreigners who had deposits there) tried to whisk their funds to safer places, draining liquidity from the islands banks and threatening them with insolvency.
The Cypriot central bank kept the system afloat by lending out 11bn of newly created money under a protocol known as Emergency Liquidity Assistance. These funds were in effect borrowed from other eurozone central banks, which put euros into the new accounts outside Cyprus that were being set up by fleeing investors.
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