One recent piece of news that has made waves in the Chinese community is the news of the sudden collapse of a large bank. Not just one, but a succession of bank failures. This has had a direct impact on the pocketbooks of countless people – especially the wealthy Chinese who keep large sums of money in these banks. Bank failures may sound like a distant event, but this time it's different, and it's a wake-up call for everyone.
On April 26, 2024, an ordinary Wednesday, a big news suddenly broke out that shocked the financial world. Regulators in Pennsylvania, USA, announced that the Philadelphia-based Republic Bank of America officially declared bankruptcy due to a broken funding chain. This is no small matter, as the bank was the first bank in the United States to announce its failure this year. Although the bank is not particularly large, with a total deposit of only $4 billion, its collapse has been like a boulder thrown into a calm lake, stirring up a thousand waves.
This is just the tip of the iceberg, though. Last year, in 2022, Silicon Valley Bank suddenly announced its collapse in March, with total assets of $209 billion and total deposits of $175.4 billion. Then, on March 12 of the same year, Signature Bank in New York was also urgently shut down by regulators due to so-called "systemic risk". Seeing this, you might think that things are bad enough, but it's far from over.
At the same time as the collapse of Bank of America, there was an even greater shock in the global financial markets when Credit Suisse declared bankruptcy. This is the fifth largest bank in the world, with total assets of $1.1 trillion! In order to control the situation, the Swiss government decided to write down the AT1 bonds issued by the bank to zero, involving up to $17.2 billion. This move has directly led to the evaporation of funds from countless investors, including many Chinese billionaires.
According to incomplete statistics, it is reported that a Chinese Internet tycoon has lost more than $60 million in this wave of bank failures. There is also a well-known domestic entrepreneur who has billions of dollars of money involved. This is undoubtedly a nightmare for the wealthy Chinese who keep large sums of money overseas.
And behind all this, it is not unrelated to the economic policy of the United States. In the early days of the epidemic, in order to save the market, the United States issued $10 trillion in less than two years from 2020 to 2021. This money was released into the market all at once, directly pushing up prices and triggering inflation. To control the situation, the Fed began to raise interest rates. Since the beginning of 2022, interest rate hikes in the United States have become more frequent.
Faced with this situation, many Chinese in the United States began to panic. Judging from the sharing of netizens, in recent times, the funds transferred by Chinese customers from banks in the United States and Switzerland have reached 76 billion US dollars and 165 billion US dollars. This large-scale transfer of funds not only reflects people's distrust of the banking system, but also exacerbates the liquidity crisis of banks.
Netizens also reacted enthusiastically to this incident, and various comments sprung up on social platforms. Let's take a look at what netizens have to say:
Netizen A: "I really didn't expect that such a big bank could fail, who can we small retail investors trust?!" ”
This netizen's concern represents the voice of many ordinary depositors, and the bank failure has directly shaken people's trust in traditional financial institutions.
Netizen B: "In the current situation, it seems that putting all your eggs in one basket is definitely not a wise choice, and diversified investment is the king." ”
This comment reflects the practice of some more experienced investors, who prefer to diversify their risk and not concentrate their funds in a single financial institution.
Netizen C: "Every time I hear this kind of news, my heart rises to my throat, is my pension safe?" ”
The security of pensions is the focus of many middle-aged and elderly people, and the failure of banks has made them worry about their future lives.
Netizen Ding: "I think it's time to think about cryptocurrency, at least more reliable than these so-called big banks." ”
This netizen's comment represents a trend of some people turning to the more emerging digital currency space after being disappointed with the traditional financial system.
Netizen E: "I just transferred all my deposits in the United States back to China, and I feel that the country is still stable." ”
For many overseas Chinese, the relatively stable financial environment in China has become their first choice.
Netizen: "Every time a bank fails, a bunch of people start saying that the economy is going to collapse, but there is no need to be so pessimistic. ”
The netizen's comment was slightly more optimistic, believing that the bank failure does not represent the collapse of the entire economy, but only a single event.
Netizen Geng: "The problem now is that everyone is starting to panic withdraw, isn't this worse?" ”
The comment points to the possible ripple effect of a bank failure, where large-scale withdrawals could accelerate a liquidity crisis for other banks.
Through the hot comments of these netizens, we can see that this bank failure incident not only caused turmoil in the financial market, but also deeply affected the mentality and behavior of ordinary people. From investment security to money management, everyone is looking for the best solution to protect their assets in this volatile financial environment.