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Bank-Run Fears Continue; HSBC Restricts Large Cash Withdrawals
Following research last week suggesting that HSBC has a major capital shortfall, the fact that several farmer’s co-ops were unable to pay back depositors in China, and, of course, the liquidity crisis in China itself, news from The BBC that HSBC is imposing restrictions on large cash withdrawals raising a number of red flags. The BBC reports that some HSBC customers have been prevented from withdrawing large amounts of cash because they could not provide evidence of why they wanted it. HSBC admitted it has not informed customers of the change in policy, which was implemented in November for their own good: “We ask our customers about the purpose of large cash withdrawals when they are unusual… the reason being we have an obligation to protect our customers, and to minimise the opportunity for financial crime.” As one customer responded: “you shouldn’t have to explain to your bank why you want that money. It’s not theirs, it’s yours.”
I know that European currencies are taking a pounding, especially in Turkey and the DOW ended down 300 points on Friday. Finance is definitely shaky right now. That said, the customer is absolutely right, your bank should give you whatever amount you want that you have in your bank account. It’s your money. But more often than not, the bank doesn’t even have that much physical cash on hand at the bank. It’s all fake numbers in a computer. That is the problem with this whole system,it’s fake and when it catches up to them, you and I are going to feel the pain.
