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Bank runs used to be slow. The digital era sped them up

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By KEN SWEET and STAN CHOE

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Any bank that lends more than it has in deposits is overleveraged and vulnerable...

That's all banks then. Banks are allowed to loan more money than they actually have.

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The solution to this is not to blame social media, but to ensure the fundamentals of banks are solid, not to do idiot things with the economy, and not to panic quite so easily when someone messages you.

Step forward the incoherent orange halfwit who lowered the regulatory bar for US banks. Apparently because it wasn't needed.

And next on the list, the Fed, who upped interest rates really fast, despite economic problems being caused by the political decision to target globalisation, start a new cold war, ruin the global economy and flip back to nation state tribalism. Economic actions like raising interest rates do not fix problems caused by half baked political decisions.

Finally, US regulators, who were found wanting, apparently not realising that specialised lenders (and tech banks are not the only single sector lenders) are more vulnerable. Particularly as we now live in a world where governments can cheerfully target and wipe out chunks of entire sectors on an ideological whim (for example, TikTok and crypto, any time soon).

Social media is a reflector and refractor of the world. So don't blame it when things go wrong. These things are not tech problems but human problems. We are still getting used to it as a species. These 'tsunami' responses will ease as we all become a bit wiser in our use of new comms channels.

In the meantime, be a bit more careful with your cash. Everyone. Including banks. Especially banks.

Thankfully, someone in the USG decided that merrily carpet bombing globalisation can get out of hand - military strikes are unlikely to hit the US, but there will be domestic economic damage if they break too much, too quickly. So they stepped in. And the Swiss Central Bank did too, for Credit Suisse.

Great film, 'It's a Wonderful Life', incidentally. Still holds up today. Better than most contemporary movies.

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