The ECB has asked some banks to monitor social media for early signs of bank runs

<p>An interesting, if perturbing, piece from Reuters overnight, citing two unnamed, 'banking executives' as sources. </p><p>In brief:</p><ul><li>European Central Bank has asked some banks to closely monitor activity on social media to detect a worsening in sentiment which could lead to a deposit run</li><li>European regulators have sharpened scrutiny of banks' liquidity after the collapse of Silicon Valley Bank and Credit Suisse in March last year, the people said</li></ul><p>A 'bank run', in a nutshell, is when customers of the bank rush to withdraw deposits at the same time. </p><p>For example, in October 2022, a social media post from a journalist saying that a 'major international investment bank is on the brink', led to a run on Credit Suisse, with clients withdrawing more than 100 billion Swiss francs ($116 billion) by the end of the fourth quarter of that year.
The speed at which clients yanked deposits has triggered a debate globally on whether, under the current regulation, institutions can withstand sudden liquidity shocks, and whether new rules might be needed.</p><p>More at <a href="https://www.reuters.com/markets/europe/ecb-asks-some-lenders-monitor-social-media-early-signs-bank-runs-sources-2024-01-24/" target="_blank" rel="nofollow">the link</a> if you are interested. I'm just popping out to the ATM …. </p>

This article was written by Eamonn Sheridan at www.forexlive.com.