Some of you might remember the recent scandal where #HSBC tried to impose cash withdraw limits on their accounts:
Well it turns out that was just a trial balloon, to see how the public might react to withdraw limits being public knowledge. Limits that are already in place!
Let me tell you what my sources are telling me.
They have tried to withdraw large amounts in cash from a bank. They were told quite categorically “No, you cannot have this amount in cash”. They then asked if they could make an appointment to receive the amount in cash and were told “No”.
Just an awkward bank clerk right?
They then proceeded to transfer the balance to another bank, and tried to make the same withdraw. They received exactly the same response “No, No, No, No, you can’t have your money”.
So what’s going on?
The #European Union is fearful of a systemic bank run taking place. After all, they have already seen bank runs in Cyprus (a successful testing ground) and other peripheral countries. Such a bank run would overwhelm even the European Central Bank.
But their steps to prevent this have been interesting to say the least…… They simply won’t allow a bank run – it’s against the rules!
What rules you say? Well, these vary from bank to bank and I’ve assembled them from a few different sources, but here they are:
- A depositor can only withdraw ~10% of their balance in large-scale cash per year.
- These limits do not apply to small one-time incidents such as ~5000 euros.
- All large cash withdraws must have a “valid” reason given. Hint: “I don’t trust my bank”, is not a valid reason.
- Daily cash machine limits are exempt.
Since the majority of cash withdraws are not large, these rules go unnoticed. But if they see an excessive/unusual amount of small daily withdraws taking place they can easily tighten these limits – all the procedures are in place.
So what are the implications of this?
Quite simple really. There won’t be a bank run in #Europe – because it’s no longer allowed. Just like a toddler, you will NOT be allowed to play with matches!!
So given the system is tearing itself apart at the seams, we’d better start looking for the weaker stitching somewhere else!
As to whether this system is in place in the #US yet I cannot say. If it isn’t yet it soon will be.