Bank Runs in China Caused by a Sudden Surge of Liquidity Concerns
Bank Runs in China caused by a Sudden Surge in Liquidity Concerns
The Survival Economist: 2-20-2022
"China’s banking sector has been dogged by a sudden surge in liquidity concerns". Where have we heard that before?
It's crazy to keep any significant amount of money in a bank. They pay virtually no interest anyway. First, it was Baoshang Bank , then it was Bank of Jinzhou, then, two months ago, China's Heng Feng Bank with 1.4 trillion yuan in assets, quietly failed and was just as quietly nationalized.
This Month, a fourth prominent Chinese bank was on the verge of collapse under the weight of its bad loans, only this time the failure was far less quiet, as depositors of the rural lender swarmed the bank's retail outlets, demanding their money in an angry demonstration of what Beijing is terrified of the most: a bank run!
Life tragedy mostly happened suddenly, overnight, with no warning. However, the bank run has plenty of warnings for those who can see and paying attention.
Disasters are for those who refuse to see and living in limbo. We will pay for letting the government and central bank greed control our lives. Cartels will go free and enjoy the fruit of our labor, while more will be poorer and starve.
They have our money converted to physical assets while we are left with federal reserve promissory notes. Liquidity problems in China, Liquidity problems in America. Only one thing to do. Buy gold bitchez. Stick to physical, not that ETF nonsense.
If you don't hold it, you don't own it. The exit doors are narrow, and everyone thinks they will be able to get out. I have no sympathy for anyone who continues to hold their nest egg in the banks in the face of such obvious financial Armageddon forthcoming.
The peasants are stupid, thinking their cash is in the bank.
Small Bank Collapse Triggers Credit Crunch in China. A growing number of analysts believe the next financial crisis is likely to start from China and its indebted banking system.
A recent incident substantiates these fears. Baoshang, a small lender based in the Inner Mongolia Autonomous Region, collapsed at the end of May, despite its numbers from a few weeks has given no indication that this was going to happen.
According to its most recent report filed with financial authorities, the bank registered a $600 million profit in 2017. It also had approximately $90 billion in assets, while its bad loans were under 2%. But then Baoshang suddenly failed, and Chinese regulators seized the bank – the first act of this kind in the People’s Republic this century – quickly blaming its owner of misappropriation of funds.
Observers note, however, that the significance of Baoshang’s collapse stems from the fact that it was caused by the country’s first default on interbank obligations. It has since become tough for smaller institutions to access the interbank lending market, on which they are heavily reliant.
And while the collapse of an Inner Mongolian bank may not sound like a Lehman-size event, in China, quantity has a quality all of its own. Numerous small and medium-sized Chinese banks combined are, in fact as large as the big players.