#Japan #Earthquake: A Quiet Run on Mizuho Bank?

Not really, but Mizuho Bank has been having a lot of problem with its computer systems since March 15, when it could not process direct deposits because of a system overload at one branch in Kansai. It has halted withdrawal on all of its ATMs in Japan. Transactions over the Internet have also been halted. It hasn't been able to fix the system yet.

Yomiuri Shinbun (in Japanese; 3/20/2011) reports that on March 20 alone, 69,000 depositors of the bank withdrew the total 3.7 billion yen (US$45 million) at Mizuho's 440 branches.

Though withdrawal from the ATMs is halted, people can still go to the tellers at the bank and withdraw up to 100,000 yen (US$1,235) if they show their passbook or cash card, and some form of personal identification. Mizuho is opening the branches on March 21 (holiday in Japan) again to accommodate the depositors.

On March 19, 85,000 depositors withdrew the total 4.97 billion yen (US$61 million).

Tweet

South Korea's Ongoing Bank Run

"Unrest" of a different kind is found in South Korea, where there is an on-going bank run.

The latest from Korea Times (2/22/2011):

One more savings bank shut down

The nation’s financial regulator said Tuesday that it has suspended one more savings bank reeling from massive construction financing loans defaults.

The Financial Services Commission (FSC) announced it had suspended Domin Savings Bank, based in Chuncheon, Gangwon Province, for six months. The lender closed its six branches there voluntarily earlier in the day for fear of a bank run.

Domin is one of five savings banks that have failed to meet the government’s recommendation of a 5-percent capital adequacy ratio. It saw a total of 18.8 billion won withdrawn, Monday.

Since new FSC Chairman Kim Seok-dong took the helm of the regulator last month, eight savings banks have been ordered to halt operations.

An FSC official said that Domin’s bank for international settlement (BIS) ratio had fallen below 1 percent, forcing the regulator to suspend its business.

Other than the suspension of Domin, the FSC chairman’s all-out efforts to stifle lingering jitters over possible shutdowns of distressed savings banks through mass withdrawals are working, as the chances of bank runs appear to have abated.

Kim visited Mokpo, South Jeolla Province, where the suspended Bohae Savings Bank is based, Tuesday, and continued to prevent an exodus among depositors of the secondary banks, who were alarmed by the financial regulator’s suspension of business of six similar lenders last week.

What is the world coming to?

Tweet

Egyptian Central Bank Will Restrict Withdrawals When Banks Open on Sunday

but there will be no limit on transfers, overseas included. Big businesses, rich Egyptians need not worry (if they are ever worried).

• ECB has $36 billion reserves.
  
  
• Individuals will be limited to daily withdrawals of 50,000 Egyptian pounds ($8,537) and $10,000 worth of foreign currency.
  
  
• No such limit for companies.
  
  
• Unlimited transfer of funds for anyone.

The central bank's deputy governor is confident that there will be no problem honoring all transactions, and there will be no weakening of the currency.

For more, go to Reuters' article.

Run, run, run, run, bank run...

Tweet

Pan-European Bank Run Tomorrow?

I wonder if they are still serious about doing it.

The simple plan - to withdraw money from your bank account - was hatched first in France, then spread to Germany, the Netherlands, UK, and Greece.

If anything, it will be no more than a symbolic gesture, a middle finger to the European banks who are being bailed out by the European taxpayers (and the US and Japan and the rest of the world, via the IMF). But is there any chance of actually causing bank runs in Europe?

Well, it might. Why? Because the European banks remain much more leveraged than the US banks. 1 euro taken out of the deposit (liability) may impact the banks' assets much more.

Here are two charts that shows the potential vulnerability of the European banks vis a vis the US banks. The first one is from Zero Hedge's November 1st article on the topic. The second one is from Wall Street Journal's July 15 article. They are both pretty much self-explanatory.

(Just a reminder: the GDP of the US and the GDP of EU are about the same, $14 trillion. Japan's GDP is about $5 trillion.)

Tweet