Two weeks ago Siemens withdrew over €500m from a ‘large French bank’, and deposited it with the European Central Bank.
Partly this may be because the ECB is paying a higher interest rate (which surely means more risk?).
But it seems more likely that Siemens fears there is a significant risk that the ‘large French bank’ could be significantly negatively affected by the eurozone crisis. Presumably that means either it could go bust, or the liquidity of funds held with the bank could be affected.
This follows the company launched its own bank last year, making it one of only a handful of companies that are able to deposit cash directly with the ECB.
Siemens now has around €5bn deposited with the ECB.
If Siemens believes there is risk with the ‘large French bank’ then presumably the risk associated with ‘small French banks’ (and others) is significant.
Siemens is probably amongst the most risk-averse companies so the risk may still be small.