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Bank run in China due to 'social media'


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https://www.bloomberg.com/news/articles/2020-07-14/spate-of-china-bank-runs-force-police-regulators-to-act

https://www.japantimes.co.jp/news/2020/07/15/business/bank-runs-china-social-media/

For decades, deposit-taking has provided a stable and low-cost funding base for China’s financial market, playing a key part in the rise of its economy to the second largest in the world. Chinese households hold about 90 trillion yuan ($13 trillion) of bank deposits, more than anywhere else in the world.

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“The perception Chinese savers had of banks being risk free is changing even though in nearly all recent cases their deposits have been protected,” said Zhang Shuaishuai, a Shanghai-based analyst at China International Capital Corp. “Once a rumor like this spreads, it brings immediate liquidity risk to a bank.”

Only "nearly"?

That might explain why savers are panicking. Seems like the Chinese authorities would understand that they need to use their printing press, if that's what it takes to make bank deposits seem risk-free.

Mind you I've thought for a long time that Chinese savers were going to get fleeced, one way or another.

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