BoG released its October 2012 balance sheet today. I commented on an increase in ‘Other Claims’ in the ECB weekly statement during October before and now it’s the time to point at the ‘guilty’ NCB which is the BoG. During October, ‘Other Claims’ increased to €122.79bn compared to €100.64bn in September (a change of €22.15bn) with regular refinancing operations dropping €23.74bn. Fortunately, collateral posted to BoG did not increase. Other than this, Intra-Eurosystem liabilities moved a bit, with Target2 liabilities increasing to €108.4bn (+€0.56bn) while liabilities related to banknotes decreased by €0.94bn to €15.49bn. It seems that funds are still exiting the country while confidence by small retail customers is a bit higher, leading to a small return of banknotes back to deposits (deposits increased by almost €1bn during October, a figure which matches the drop in banknotes). The fact that Greece is the only country in a bailout program where Target2 liabilities have not dropped significantly is a sign of stress.

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