Thursday, September 25, 2008

Bank Runs Start In Hong Kong...Is America Next

We've all read stories of the great banks runs as Wall Street crashed, and we as a nation faced the Great Depression...well, put on your seat belts, as Hong Kong has a bank run!
Rumours spark Hong Kong bank run
Depositors swamped the bank after text messages questioned BEA's financial stability [AFP]

Hundreds of customers have descended on branches of Hong Kong's Bank of East Asia (BEA) to demand their deposits back amid continuing nervousness over the state of global financial markets.

The bank said rumours questioning its stability were false and blamed the panic on the circulation of "malicious" mobile phone text messages.

"The Bank of East Asia is not suffering from financial difficulties. We have enough cash to handle the needs of depositors," Joseph Pang, the deputy chief executive, told reporters at his company's headquarters on Wednesday.

He declined to specify how much customers had withdrawn, but said it was not a large amount and no major clients had pulled out their money.

The bank gave assurances that its capital ratio was well above international standards.

Seeking to calm investors, it also said that its combined exposure to failed US investment bank Lehman Brothers and bailed-out insurer American International Group (AIG), was about $61m.

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