# Another Bank Run Underway



## wayneL (25 September 2008)

This time it's Hong Kong. 

http://uk.biz.yahoo.com/24092008/140/hong-kong-bank-mobbed-savers.html



> Wednesday September 24, 02:29 PM
> Hong Kong Bank Mobbed By Savers
> 
> By Sky News
> ...


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## chops_a_must (25 September 2008)

Pics or it didn't happen!


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## wayneL (25 September 2008)

http://www.bloomberg.com/apps/news?pid=photos&sid=as3TdrjmO0ag


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## chops_a_must (25 September 2008)

Haha.

What do you reckon would happen if I gathered about 30 people together, and started milling around outside a bank?

Would be a good social experiment right now I reckon.


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## nomore4s (25 September 2008)

Especially if it was Bankwest


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## chops_a_must (25 September 2008)

nomore4s said:


> Especially if it was Bankwest




If only uni was in the city... it would be all too easy.


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## GreatPig (25 September 2008)

And just in case you doubt that's the Bank of East Asia, here's another photo. If you look carefully, you can see the same seal and picture of Tian Tan on the back wall.






Mind you, perhaps that was on a day when they advertised 12%pa term deposits OTC for that day only. 

GP


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## GreatPig (25 September 2008)

Or maybe it actually is BankWest... 






GP


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## IFocus (25 September 2008)

nomore4s said:


> Especially if it was Bankwest




My brother causally phoned me up the other day and said he had his savings's in BW and asked what he should do.

I said *You F**ken What?
*

I didn't know he was with BW so next day on open he headed down to the local branch to transfer his funds about $180K I think and joined the que he was saying the staff were stressed


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## CAB SAV (25 September 2008)

chops_a_must said:


> Haha.
> 
> What do you reckon would happen if I gathered about 30 people together, and started milling around outside a bank?
> 
> Would be a good social experiment right now I reckon.




Excellent. Send chas from the Chasers team an email & tell them to mill around NAB.


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## disarray (25 September 2008)

my old man closed his $150k bankwest account today as well and moved to commonwealth. interesting times.


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## basilio (25 September 2008)

This is not a good look folks. 

*Any bank, every bank *can be closed down with a run. No bank has the liquidity to stand even a small lack of confidence.

I suggest there is enough trouble around without  creating further destruction of confidence - even if it is a bad joke.  

Cheers


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## GreatPig (25 September 2008)

disarray said:


> my old man closed his $150k bankwest account today as well and moved to commonwealth.



Give it another few months and Commonwealth might own BankWest anyway.

GP


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## Green08 (28 September 2008)

The Sydney Morning Herald - Weekend edition Sep 27 - 28 2008 Pg 28

"...Indeed, of 250,000 banks in the world, only 18 are rated a AA investments, and Australia's Big Four are amoung them."


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## Julia (28 September 2008)

Green08 said:


> The Sydney Morning Herald - Weekend edition Sep 27 - 28 2008 Pg 28
> 
> "...Indeed, of 250,000 banks in the world, only 18 are rated a AA investments, and Australia's Big Four are amoung them."



On the basis of the previous performance of the ratings agencies, I have to say I find that less than reassuring.


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## grace (28 September 2008)

Julia said:


> On the basis of the previous performance of the ratings agencies, I have to say I find that less than reassuring.




To my knowledge, Rabobank has the only, and highest AAA rating in Australia.  We have some money invested with them.   The pillars are AA+, and so on down the line from memory. 

However,  if you look what citi, UBS etc had prior to this year, one must really look behind the rating.  The problem is, we don't really know what our banks have been involved in......


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## BBand (28 September 2008)

Rabobank AA+
Robabank AAA?


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## finnsk (28 September 2008)

Dont know if it means anything but last Friday I was at the local Westpac bank early afternoon and the teller told me that they was running out of money because they have had a large mount of withdrawals I did not have any problems but the guy next to me did not look too happy.


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## white_goodman (28 September 2008)

finnsk said:


> Dont know if it means anything but last Friday I was at the local Westpac bank early afternoon and the teller told me that they was running out of money because they have had a large mount of withdrawals I did not have any problems but the guy next to me did not look too happy.




pffft thats rumour mongering if ive ever seen it


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## mayk (28 September 2008)

In light of the above discussion. How much money is guaranteed by the federal govt. (or RBA) in case a bank does go under? 20,000?

I already have deposits in two separate banks. Needless to say they belong to the "big four".


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## Dowdy (28 September 2008)

Green08 said:


> The Sydney Morning Herald - Weekend edition Sep 27 - 28 2008 Pg 28
> 
> "...Indeed, of 250,000 banks in the world, only 18 are rated a AA investments, and Australia's Big Four are amoung them."




Whats the credit rating of ING. I'm under the impression that they are one of the largest banks in the world


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## Ah Pek (28 September 2008)

I think the big 4 will be fine.  Nothing to do with prudent management but rather they have become experts in running an oligopoly.  Simply rape their customers for fees and high differential interest rates.  They are no less greedy and unethical as their US counterparts.


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## dhukka (28 September 2008)

Julia said:


> On the basis of the previous performance of the ratings agencies, I have to say I find that less than reassuring.




Well said Julia, I'm glad someone has a memory longer than a week. Remember that Fitch publicly admitted that their own models assumed that house prices would never fall. How good of a predictor have the ratings agencies been of subsequent distress? I would argue that have been more reactive than predictive.


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## Green08 (28 September 2008)

I didn't say I agree with the rating agencies just posted what was in the paper.  I think the rating agencies have actually lead people and businesses under false assumptions for years and have alot to do with the current problem.  

As far as ING I have know idea.


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## It's Snake Pliskin (29 September 2008)

Anyone who starts rumours about bank runs needs to be dealt with by the courts much like bomb scare pranks etc.

It is ****ing with peoples' savings.

And telling everyone that you withdrew funds is uncool too. Just because someone is worried does not mean the rest of the world needs to know and prompt others to do the same on a healthy bank, whatever bank that may be.


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## cuttlefish (29 September 2008)

finnsk said:


> Dont know if it means anything but last Friday I was at the local Westpac bank early afternoon and the teller told me that they was running out of money because they have had a large mount of withdrawals I did not have any problems but the guy next to me did not look too happy.




Thats not uncommon - you typically need to make a booking for larger cash withdrawals because they don't always have wads of cash lying around.  (the banks don't keep millions of dollars of cash sitting around in the branch networks).  I've taken $10,000 or $20,000 cash out at times without booking it and they've commented that they'll have to check that they have enough and reminded me I should book it.  I suspect this is what the comment about running out of money due to a lot of withdrawals was referring to.


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## bean (29 September 2008)

It will happen quickly if any Bank etc in Australia goes
Macquarie, National? Bendigo? etc etc

Over the weekend 
Fortis a Belgium bank - from another forum 

'The Belgian-Dutch Fortis bank(that took over ABN-Amro bank last year) is near collapse .
95% of the population don't realize it for the moment.'


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## Trembling Hand (29 September 2008)

Yeah 
Fortis Receives EU11.2 Billion Rescue From Benelux Governments 

This makes me a bit wobbly, Fortis is IBs clearing and custodial bank in Oz.

Not saying run just getting a little close to home.


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## finnsk (29 September 2008)

white_goodman said:


> pffft thats rumour mongering if ive ever seen it



Did not mean it as spreading a rumour just what was happening thought I would give my experience to fellow members here, further more I was not withdrawing money just exchange for coins as I need them for my business. 
As for my money in the banks I am getting a little nervous in case of a bank run ect. 
How secure is our money in the Australian bank system?


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## rub92me (29 September 2008)

Trembling Hand said:


> Yeah
> Fortis Receives EU11.2 Billion Rescue From Benelux Governments
> 
> This makes me a bit wobbly, Fortis is IBs clearing and custodial bank in Oz.
> ...



I'm putting my trust in the below information provided by IB (for now at least) 


> How Much Exposure Does IB Have to a Single Bank?
> IB spreads its assets in segregated accounts for the benefit of customers across at least six of the largest banks (as of September 2008). IB’s customer segregation account at Citibank is used as the “conduit” account for deposits and withdrawals but funds are then spread across these federally-approved depositories.
> 
> It is our belief that the U.S. government would do everything in its power to prevent the failure of any of the major money-center banks with whom IB maintains deposits. In the event that such a bank did fail, and in the further event that the federal government did not arrange assistance for the bank, then IB’s own, significant, proprietary capital would be required to be used to guarantee IB’s obligations to our customers.


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## white_goodman (29 September 2008)

finnsk said:


> Did not mean it as spreading a rumour just what was happening thought I would give my experience to fellow members here, further more I was not withdrawing money just exchange for coins as I need them for my business.
> As for my money in the banks I am getting a little nervous in case of a bank run ect.
> How secure is our money in the Australian bank system?




yeh fair enough, but if we cant keep our money in the big 4 theres really no other place that we could keep it...

could you imagine the turmoil if people actually lost their savings..


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## Trembling Hand (29 September 2008)

That is not my point rub. Fortis doesn't hold IB funds its the clearer and custodial holder of IBs ASX. Like it is to many of the big independent funds.


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## finnsk (29 September 2008)

white_goodman said:


> could you imagine the turmoil if people actually lost their savings..



I know I would not be too happy, if I was going to lose my money I want to do it my own way, not the banks way


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## disarray (29 September 2008)

It's Snake Pliskin said:


> Anyone who starts rumours about bank runs needs to be dealt with by the courts much like bomb scare pranks etc.
> 
> It is ****ing with peoples' savings.
> 
> And telling everyone that you withdrew funds is uncool too. Just because someone is worried does not mean the rest of the world needs to know and prompt others to do the same on a healthy bank, whatever bank that may be.




yeah you're right, people shouldn't be responsible for their own destiny, they should just leave the fruits of their lifes work in a bank that doesn't really give a rats ass about depositors and we'll all just take the word of a bunch of multimillionaire bank board fatcat pricks that everything is alright.

form a queue, join the line, your time to get fleeced will come.


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## It's Snake Pliskin (29 September 2008)

disarray said:


> yeah you're right, people shouldn't be responsible for their own destiny, they should just leave the fruits of their lifes work in a bank that doesn't really give a rats ass about depositors and we'll all just take the word of a bunch of multimillionaire bank board fatcat pricks that everything is alright.
> 
> form a queue, join the line, your time to get fleeced will come.




Davros that was not my point. 

Rumours can cause a run on a healthy bank. In the current environment a little common sense is useful.


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## Aussiejeff (29 September 2008)

It's Snake Pliskin said:


> Davros that was not my point.
> 
> Rumours can cause a run on a healthy bank. *In the current environment a little common sense is useful.*




Wise words indeed.

'Tis a pity all the worlds Wunder-Banken-Menschen hadn't applied a little before it actually got to this point?

Ho-hum......


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## chops_a_must (29 September 2008)

Trembling Hand said:


> Yeah
> Fortis Receives EU11.2 Billion Rescue From Benelux Governments
> 
> This makes me a bit wobbly, Fortis is IBs clearing and custodial bank in Oz.
> ...




I thought you were the champion of IB's safety. 

Anyway... it means Fortis as far as I'm aware, is safe........... for now.


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## Macquack (29 September 2008)

mayk said:


> In light of the above discussion. How much money is guaranteed by the federal govt. (or RBA) in case a bank does go under? 20,000?




No guarantees.

" Australia is one of only two countries, the other is New Zealand, in the 30-member OECD that does not have an explicit government guarantee over depositors' funds with banks."
The Australian
March 28, 2008 

Bank customers would be guaranteed to quickly recover $20,000 of their deposits if their bank collapsed *under a plan before *the federal Government to retain confidence in the nation's financial system.

They had better hurry up before it is too late.


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## refined silver (29 September 2008)

Another one bites the dust!

Citigroup buy Wachovia. Wachovia's share price drops 91% in pre-mkt trading, after also falling heavily last week.

The UK mortage lender B&B was bought by a Spanish bank heavily involved in mortgage securities and the Spanish real estate mkt is the worst in Europe!

Broke banks buying broke banks and then it looks like the govt is bailing less of them out!!


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## mayk (29 September 2008)

Macquack

Well that is not reassuring! What about the RBA bonds? Are they guaranteed by the Govt?


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## auric (29 September 2008)

mayk from their web site:
 While interest payments and the face value payment at maturity are guaranteed by the Commonwealth Government, it is possible for capital gains or losses to be made if Bonds are sold prior to maturity. 

if they default where are all in de.p  sh.t


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## Jack5 (1 October 2008)

disarray said:


> my old man closed his $150k bankwest account today as well and moved to commonwealth. interesting times.




Bankwest has a very high credit rating, A+, which means your old man's money was as safe as it was in any other bank of the big 4, at least for the next couple of years. At the moment Bankwest offers the highest interest rate , so it is actually the best chance to make some easy money  with nearly zero risk.


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## wayneL (1 October 2008)

Jack5 said:


> nearly zero risk.



LOL


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## Jack5 (1 October 2008)

wayneL said:


> LOL




OK...so you think the risk pretty high? Why?


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## white_goodman (1 October 2008)

Jack5 said:


> OK...so you think the risk pretty high? Why?




well if everyones panics like he did wont they have a problem


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## rub92me (1 October 2008)

Jack5 said:


> OK...so you think the risk pretty high? Why?



The risk doesn't have to be pretty high to be far from zero. Checkout the credit ratings of a random sample of 5 banks just before they went over the cliff. All it needs is a sniff of blood and there is a piranha fest these days.


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## disarray (1 October 2008)

credit ratings don't mean anything anymore, and bankwest are being offloaded by hbos so there is uncertainty. when things settle down the money can always be shifted back, everyone has their own personal level of defensive paranoia so whatever works.

theres plenty of 50's somethings who were (note: were) planning to retire on their superannuation soon but not any more, it just goes to show you can't trust anyone or anything, and your best bet for survival is to control your own financial destiny.


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## wayneL (1 October 2008)

Jack5 said:


> OK...so you think the risk pretty high? Why?



Echoing rub92me's comments, I don't think the risks are "high".

But bank deposits outside of a few very conservative institutions are a hell of a lot more risky than appreciated.


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## Jack5 (2 October 2008)

mmm....Thanks for all your opinions which make good sense, but I am confident that Bankwest is going to be safe. The key question mark here would be "whether HBOS will collapse?" If it does, Bankwest will sink with it. However, HBOS is just too big to collapse, and under current circumstances, HBOS will definitely be swallowed by Lloyds TSB, which means Bankwest will be backed up by one of the largest bank corporations in the world. 
Futhermore, Bankwest is tightly regulated by APRA. It will not make sense that it will be in trouble anytime soon. 
The only thing that I don't quite understand is what sort of impact it would be if it was sold to another financial institution. Will it make the deposits more secure or worse?


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## cuttlefish (2 October 2008)

Jack5 said:
			
		

> mmm....Thanks for all your opinions which make good sense, but I am confident that Bankwest is going to be safe. The key question mark here would be "whether HBOS will collapse?" If it does, Bankwest will sink with it. However, HBOS is just too big to collapse, and under current circumstances, HBOS will definitely be swallowed by Lloyds TSB, which means Bankwest will be backed up by one of the largest bank corporations in the world.
> Futhermore, Bankwest is tightly regulated by APRA. It will not make sense that it will be in trouble anytime soon.
> The only thing that I don't quite understand is what sort of impact it would be if it was sold to another financial institution. Will it make the deposits more secure or worse?



But for the sake of some basis points of income, is it worth the risk?  Who knows what the government would do if a bank got in trouble, but at the moment it is under no obligation to do anything.

What I do think is that if Bankwest failed and there was no bailout - there would be a newspaper headline or two and some ACA and Today Tonight stories about the poor people that lost all their money and a shot of an old couple that lost their entire retirement savings etc. and the swag of businesses that suffered or went broke etc. as well as the obligatory debate on whether the government should have stepped in or not etc.

But if CBA, Westpac, ANZ or NAB went bust and the government decided not to enact a bailout there would be rioting in the streets and all hell would break loose.

There is safety in numbers in being in a 'big four' bank account (if its an investment product or 'special account' offered by the bank it may not be a bank account and it may not even be an asset of the bank but of a related or subsiduary institution so fine print is important - as Opes clients found out).  Out of the our banks I'd probably favour CBA or WBC over ANZ or NAB.

If there were ever  a situation where the government had to choose between a bankwest and one of the majors it would favour the majors.

(all that being said I think the government would work to enact some sort of bailout if a bank did go bankrupt - at least for the first one or two that went under anyway ...  not so sure about credit unions and building societies and these have gone broke in the past - I think it was Pyramid that went broke in the late 80's or early 90's).


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## disarray (2 October 2008)

cuttlefish said:


> What I do think is that if Bankwest failed and there was no bailout - there would be a newspaper headline or two and some ACA and Today Tonight stories about the poor people that lost all their money ...
> 
> But if CBA, Westpac, ANZ or NAB went bust and the government decided not to enact a bailout there would be rioting in the streets and all hell would break loose.




quoted for truth. while following the herd isn't always a good idea, there is safety to be had in numbers.


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## georgey (11 October 2008)

Interesting topic. What are the thoughts on BEN/ADB?
Leveraged Equities are backed by ADB so wonder how secure
funds are with them also and whether the merger with BEN would
be beneficial at times like this.
Cheers


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## Green08 (14 October 2008)

> FOR IMMEDIATE RELEASE
> 
> October 10, 2008 Media Contact:
> 
> ...




http://www.gracecheng.com/stocks/2008/10/10/market-summary-what-a-ride-and-bank-failures-too/


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## Green08 (14 October 2008)

> *Failed Bank List *​-------------------------------------------------------------------------
> The FDIC is often appointed as receiver for failed banks. This page contains useful information for the customers and vendors of these banks. This includes information on the acquiring bank (if applicable), how your accounts and loans are affected, and how vendors can file claims against the receivership.
> 
> _This list includes banks which have failed since October 1, 2000._
> ...



http://www.fdic.gov/bank/individual/failed/banklist.html


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## Green08 (14 October 2008)

> *Source: Federal Deposit Insurance Corp.​*
> In 1989,  534 banks closed their doors.  Who picked up that tab? I don't even recall hearing about it in the News. It was on Bush Seniors watch 1989 to 1993. Bush Sr. is credited with about 1,015 bank collapses. That would include Johnnie McCains Keating 5 swindle that he had nothing to do with.
> 
> Ronald Reagan had 2,036 bank failures during his term..1981 to 1989 in office.
> ...



http://www.nowpublic.com/world/history-united-states-bank-failures


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## Page (20 October 2008)

right now after looking to the market situation every one is facing towards bank for withdrawing the money. Bank usually maintain CRR for that but if people comes in bulk then it is not possible to pay money to all the customer which raised rumors and panic all around. 

This happens not only with this bank but with all banks in the world...............


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