* Accelerating withdrawals point to more ECB reliance
* Another three-year LTRO seen as only short-term fix
* Demand for three-month cash could rise
By Kirsten Donovan
LONDON, May 18 (Reuters) - A scramble by savers to withdraw cash from banks as they fret about a Greek euro zone exit and the health of Spanish financial institutions may leave lenders even more reliant on the European Central Bank's cheap financing operations.
The amount of cash they take could rise at the ECB's one-week, one-month and three-month operations in the next few weeks and some analysts think the euro zone's central bank may have to plug the funding gap with more cheap longer-term loans.
But with 800 billion euros of excess liquidity already sloshing around in the banking system, money market rates are unlikely to fall much further unless banks believe the ECB will cut the 0.25 percent rate it pays on overnight deposits.
"Banks will have to replace lost deposits and so long as they've got the collateral they can go to the ECB," said RBS rate strategist Simon Peck.
"We will probably see an increasing reliance on ECB funding from banks in Spain and Italy. Those without sufficient ECB eligible collateral can turn to their national central bank via the Emergency Liquidity Assistance."
The ECB holds weekly financing operations and the next three-month tender will be held on May 30.
"The Greek elections are still four weeks away, so if the deposit flight continues to gain pace then banks will want to shore up their funding profile as much as possible, which would point to use of the three-month funding operations," Peck added.
According to minutes of Greek President Karolos Papoulias' comments to political leaders posted on the presidency's website, Greek savers withdrew at least 700 million euros from the country's banks on Monday alone..
Spain's Bankia, meanwhile, has seen its share price slump as much as 30 percent after a report - denied by the government - that customers had drained more than 1 billion euros from the partly nartionalised lender in the past week.
There was no let up in the bad news on Spanish banks, with Moody's downgrading 16 of the country's lenders late on Thursday and bad loans rising to their highest level in outstanding credit portfolios since 1994.
Investors panicked by the prospect that a political crisis in Greece could trigger a euro zone financial meltdown have pushed prices for German debt to record highs in recent days, disregarding near-zero returns as they rush for safety.
Greek bank deposits have fallen almost 30 percent since the start of 2010, according to ECB data, and Societe Generale said a similar outflow in Spain or Italy could create funding gaps of 140-280 billion euros and 200-400 billion euros respectively.
"As deposit outflows outpace de-leveraging, we need another one trillion euro LTRO," the bank's strategists said, referring to the ECB's longer-term refinancing operations in December and February, which pumped almost 1 trillion euros of three-year cash into the banking system.
Whether banks have the collateral to plug such a funding gap is another matter. A number of Greek banks are no longer able to fund themselves at the ECB, relying instead on Emergency Liquidity Assistance (ELA) from the Bank of Greece, for which lower quality collateral can be used.
Latest ECB data, which covers the period to the end of March - before the current intensification of the crisis - showed Spanish bank deposits have been relatively stable over the last two years, while those at Italian banks have actually risen.
Top-rated, core euro zone countries such as Germany and France saw bank deposits increase by between 5 and 10 percent in the same period.
Overnight Eonia rates are pinned roughly between 0.33 and 0.35 percent, constrained from falling in much further by the ECB's 0.25 percent deposit rate, which acts as a floor.
According to BNP Paribas, markets are already pricing an "aggressive" 66 percent chance of a 12.5 basis point cut in the ECB's deposit facility rate by year-end.
A higher expectation of such a cut would be a stronger factor in pushing Eonia rates lower than a further increase in excess cash in the banking system but many analysts believe that the ECB will not take such a step.
"We don't believe that a depo rate cut could have any meaningful effect on the interbank system and the real economy at the current juncture," said strategist Matteo Regesta in a note.
"Another three-year LTRO would buy more time, but, as we have learnt by now, its effects would not be long lasting."
'Airtel Money Market' Launched - Modern Ghana
To add value to its mobile commerce product, Airtel Ghana has launched an online store for the marketing and sale of goods.
The new online portal, ( www.airtelmoneymarket.com http://www.airtelmoneymarket.com/ ), will allow Ghanaians to use social interactions and contributions from trusted individuals to buy online goods.
It also enables merchants to have multiple outlets in addition to opening a virtual store and stocking it with goods for sale.
The product, which runs on Rancard's Rendezvous technology, will provide customers, who visit the portal with the opportunity to window shop as well as compare prices from different merchants from the comfort of their homes or offices.
Speaking at the ceremony in Accra, Philip Sowah, Managing Director of Airtel Ghana, said the addition of the online store to the company's mobile commence product is in line with the company's quest to introduce innovative products, which customers will find beneficial to their daily lives.
'The Airtel money market is just another addition to the many other packages we have added since the launch of Airtel Money,' he said.
Kola Sonola, Director for M-Commence at Airtel Ghana, explaining how Airtel money works, said the process involves purchasing through recommendations on a regular social commence website.
'When a user checks out of the virtual store after making all their purchases, they receive an SMS message asking for a confirmation of the order and payment of amount.
'Once the user selects send, the money is transferred to the retail vendor, and the user receives another text message with a purchase code.
He said the purchase code will then be used to pick their order from the merchant.
Managing Director of Rancard, Kofi Dadzie said the Airtel Money Market provides a burgeoning market that could be energized to create high demand in online shopping through social recommendations.
By Jamila Akweley Okertchiri
10 Things Facebook Should Spend Its IPO Money On - Mashable.com
European money markets dry up - Sydney Morning Herald
AUSTRALIAN banks have been forced to shift to a cautious footing on funding with money markets in Europe effectively closing, says the ANZ chief executive, Mike Smith.
Global markets were jolted yesterday by fresh fractures emerging in Europe. The Australian market fell to its lowest for the year.
The falls were prompted by growing expectations that Greece will leave the eurozone and fresh concerns about the health of the Spanish banking system.
Australia's benchmark S&P/ASX200 fell 110.9 points, or 2.67 per cent to 4046.5, marking a biggest single day loss since November.
The Australian dollar also fell to its lowest level in almost six months, trading last night at US98.24¢.
Meanwhile, Australian government borrowing costs continued to hit fresh lows as investors looked for safe havens.
Fitch Ratings cut Greece's rating a notch to CCC amid fears anti-austerity parties will triumph in new elections set for next month and drive the troubled country from the eurozone.
Moody's downgraded 16 Spanish banks, citing the effects of the country's recession and reduced creditworthiness of the country's government.
''Fears over Greece and the consequences of capital flight from peripheral European banks sent a shudder through markets everywhere. Equities are a sea of red. Asian bourses are especially weak,'' said Adam Donaldson, head of debt research at Commonwealth Bank.
Even as the European crisis unfolds, Mr Smith said the world was not yet looking at a Lehman-style credit crunch with money markets in Asia and the US still open.
''The situation is more manageable than 2008 when we had the shock collapse of Lehman's and Australian banks are well placed right now,'' Mr Smith said yesterday.
''We have really had two years to anticipate and to plan for the scenario that's now unfolding in Greece and southern Europe.''
The real problem in Europe was not so much the economic contagion but the ''political contagion'' spreading through the region, Mr Smith said.
This week Commonwealth Bank's chief executive, Ian Narev, said his bank has been preparing for some time for a possible exit of Greece from the eurozone.
While this would soften the financial shock for the bank, the implications of such a move would be "material", Mr Narev told an analyst briefing.
Former Future Fund chairman David Murray has said Europe's raging financial storm represented a growing threat to Australia's banks that are still dependent on offshore credit markets to fund their business.
Mr Murray said Australia's finance system could not escape the ''longer term liquidity consequences'' of the squeeze on global credit markets.
''The contagion through the banking sector and government and the banks is the immediate issue,'' Mr Murray told BusinessDay.
Local Economy Better Gauge for Business Spending: Survey - CNBC
A new survey from Bank of America finds that small business owners are more confident in their local economies than the national economy overall. And as they see growth in the local economy, they will grow their businesses.
The survey, of 1,300 small business owners, reveals that 42 percent of respondents are more confident in their local economy vs. 35 percent in the national economy. An even bigger percentage — 69 percent — say their local economy is important to the overall success of their business.
“Overall, we see an improvement of confidence among small business owners,” said Robb Hilson, Bank of America [BAC Loading... () 
] small business executive, during a conference call on Thursday about the survey. “Arizona, the Inland Empire, Las Vegas — there are still concerns there. But in spite of the challenges, there is growing optimism among small business owners.”
The doesn’t mean national issues are not affecting small business owners. Healthcare costs, corporate tax rates, oil and gas prices, and the housing market were all high on the list of concerns for small business owners.
Not to mention credit restrictions. Respondents were split on whether lending criteria should be more lenient or more strict: 46 percent said they should be more lenient, and 7 percent there should be no requirements. A combined total of 45 percent said requirements are appropriate as they are or that more restrictions are needed to protect owners from defaulting.
According to Bank of America, it has added nearly 1,000 small business bankers to branches across the country in order to increase lending to small businesses. So far this year, it has extended more than $1.7 billion in new credit to small business owners who have less than $20 million in revenue.
While the latest Thomson Reuters/PayNet Small Business Lending Index showed that lending to small businesses slipped in March, with small business owners pulling back on borrowing, BofA’s Hilson said he expects businesses to start spending on equipment and hiring.
“In spite of the challenges, there is growing optimism,” he said. “There are lingering questions on national leadership, taxes, but as the survey showed, business owners are more concerned about their local economy. And that’s where we are starting to see activity.”
The survey was conducted between March 17 and April 9.
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