Re:DeFi bug accidentally gives $90M to users
by zinekeller on Friday October 01, 2021 @09:29AM
(#28718182)
In that case, the nationalisation in that context is to apply brakes - sure those brakes are broken already and so wouldn't prevent a collapse - but its intention is to allow Bank of England's and UK government's protection schemes to be applied with as minimal loss to the taxpayers' and other banks' customers' money as possible. In this case, it limited the run to only the original bank (unlike 19th and early 20th-century bank runs resulting runs in other unrelated banks). Unfortunately, if your a customer of Northern Rock, it sucks so bad.
Re:DeFi bug accidentally gives $90M to users
by SkipperCat on Friday October 01, 2021 @09:29AM
(#28718185)
Mia culpa.... I was thinking locally as a US citizen. I can't really speak for what's happened in other places but appreciate the context. Thanks.
It's still not the same as an old school bank run. The UK government guarantees the first £85000* of each depositors money (those with more are well advised to split it across multiple banks)
* It was somewhat less in 2007
Re:DeFi bug accidentally gives $90M to users
by iso1210 on Saturday October 02, 2021 @08:29AM
(#28728077)
As Channel 4 said at the time
> Deposit guarantees should prevent this. But even after an extraordinary unlimited lending facility granted by the Bank of England and agreed by the Chancellor, customers preferred the sight of real cash.
Another example of a bank run is the bank run of Northern Rock on the 14th September 2007. This was the biggest banking problem in the United Kingdom since the banking crisis in the seventies, this was also the first bank run in the United Kingdom in 150 years. Eventually, this resulted in the nationalization of Northern Rock. It is interesting to analyze this bank run because it is one of the most recent bank runs in Western Europe. Furthermore, the bank run from Northern Rock is a special case because it was a ‘reversed bank run’. Normally during a bank run, a lot of depositors first withdraw their money, due to lack of confidence for example, and then the bank will as a result of the huge withdraws get into a liquidity crisis. However, in the case of Northern Rock, the bank first got into a liquidity crisis and as a result of that, depositors withdrew their money from the bank.
https://arno.uvt.nl/show.cgi?fid=116241
It certainly looks like a bank run - the scenes in London today fulfilled the dictionary definition.
And heading north to Nottingham, and Middlesbrough, the same extraordinary scenes. savers forming long queues to drain their life savings from Northern Rock.
Banking -- an industry built on credibility, confidence and trust. But the Rock looks wrecked even in its home town of Newcastle.
Deposit guarantees should prevent this. But even after an extraordinary unlimited lending facility granted by the Bank of England and agreed by the Chancellor, customers preferred the sight of real cash.
https://www.channel4.com/news/articles/business_money/the%2B...