Nowcasting the Greek (semi-) deposit run: Hidden uncertainty about the future currency in a Google search

We investigate whether Greek depositors' uncertainty about the future currency contains information for the observed acute depletion of deposits in the Greek banking system. We conduct aNowcastingexercise using the Google search intensity for the term << Drachma >> and document that higher search intensity leads to higher Total deposits outflows, which are primarily driven by outflows in Time deposits. We also find that the Google search intensity for the term << Drachma >> exerts an asymmetric impact across One-Day deposits and time deposits. In addition, the asymmetry is also present between firms' deposits and households' deposits. These findings support that 'a flight-to-safety' behaviour caused by uncertainty about the future currency accounts for the erosion of deposits in Greece.

Automated summary

The study shows that Greek depositors' uncertainty about the future currency leads to deposit outflows, especially in time deposits, indicating concerns about the future currency. Asymmetric impacts are also observed between one-day deposits and time deposits, as well as between firms' deposits and households' deposits.