Here is a slightly surprising sign that Greece is in the classic throes of a bank run: car sales jumped by 47pc in April. It was the 20th consecutive month that car registrations of new and used vehicles has risen.
People living in a country gripped by financial turmoil often worry about the security of their money. If it’s in a bank, it can be caught up in capital controls and lost through insolvency. Better, then, to spend it. And the purchase of choice is often a car.
This makes motor vehicle sales figures a decent proxy for financial turmoil (under some circumstances).
Ordinary Greeks, many of whom are not wealthy enough to hold bank accounts outside of the country, are taking their money of the financial system and spending it on “hard” assets.
A similar phenomenon was observed during Russia’s financial meltdown late last year. The rouble’s crash resulted in many Russians scrambling to make “high-ticket” purchases – like cars.
During Cyprus’s banking crisis in 2013, car registrations increased by nearly a third in 10 months. Many Cypriots rightly feared their unsecured deposits would be at risk from the “bail-ins” of the country’s biggest banks.
Full article: The real sign that Greece’s financial turmoil is getting worse (The Telegraph)