Traditionally savings fanatics, Germans they trust their banks despite their problems, and avoid deposits in foreign banks, despite the higher returns they can offer. Especially after the collapse of Silicon Valley Bank, their fear of being embroiled in some kind of crisis is reflected in the reduction in their deposits in foreign banks.

Until March 10, when the Silicon Valley bank collapsed, German households invested their savings in smaller banks in weaker economies such as Lithuania, Malta, Italy and Portugal to reap higher returns from higher interest rates. Until last Thursday, the highest 12-month interest rate, reaching 3.5%, was held by a small Italian bank, Smart Bank. It is followed by Izola Banka in Malta and Banka Kovanika in Croatia with an interest rate of 3.45%. At the same time, by contrast, the highest rate that German depositors could receive on their German bank accounts was only 2.55%.

However, from March 10, the Germans completely switched to their internal banks. Demand for foreign deposits has fallen sharply by 15-20% compared to the February level, according to Check24 and Biallo platforms, which work with banks and collect data. In the same period, on the contrary, there was an increase in demand for German bank accounts, which are considered safer due to the country’s high credit rating, as well as due to two different deposit insurance mechanisms. These ingrained beliefs may not fully reflect reality, however, given that Germany’s flagship bank, Deutsche Bank, also found itself in the midst of a banking crisis a few days ago, with its shares in a 13% free fall. After all, he too had many sins in the past, albeit slightly different from those of Credit Suisse.

Since March 10, the demand for accounts in German banks, which are considered more secure, has increased.

The mass exodus of Germans from foreign banks and their transition to German ones shows a great similarity with the departure of American depositors from small regional US banks and their transition to large banks of the country, recorded after the collapse of the SVB. However, this could increase the cost of financing for banks in smaller and weaker European countries, which are counting on a huge pool of German savings. In an interview with Reuters, Moritz Felde, general manager of the Check24 platform, noted that after March 10, the psychology of investors and depositors has changed and there is a great demand for bank accounts of countries with the highest credit rating, the well-known triple A. According to a representative of the Biallo platform, after March 10 questions and inquiries about deposit insurance schemes in Germany quadrupled. The two platforms, however, do not publish data on their activities, so it is not easy to determine how much money Germans keep on deposits abroad.

However, it is estimated that foreign banks have attracted 10% of the 83 billion euros that the Germans have placed in term accounts with German banks over the past six months, the loss of these deposits in the future could hurt these smaller foreign banks. It should be noted that in general, German households accumulate savings of 2 trillion. Euro.