Reply #4: Ordinary people

[Turbineguy]

have been removing cash from their bank accounts and putting cash into deposit boxes or their mattresses. American Money Market Funds have been removing money from the European banks (down by 97%). It's better to take your money out before the doors close. There has been a huge crisis of confidence in the solvency of the banks. Last week there was a news item about the Deutsche Bank having reserves of 1.7%.

Bank stocks have taken a serious (and well deserved) beating over the past few months.

When (and if) confidence returns, cash will flow back into the banks. Let's hope they deal with it wisely instead of thinking they'll make piles of profits lending it to some bankrupt government.

They are supposed to be increasing reserves under the new Basel Accord. And that's a good thing. But it will eat into fantasy profits and bonuses.