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In the Netherlands a bank got destroyed a few years ago by a single person starting a media campaign for a bank-run. This was done in response to "shady practic

by t0mas88 10y ago

In the Netherlands a bank got destroyed a few years ago by a single person starting a media campaign for a bank-run. This was done in response to "shady practices" on the mortgage side of the bank. He got people to withdraw over 600 million from DSB Bank in a few days, which caused the bank to run out of liquidity and forced them to freeze accounts. This meant they lost all trust in the market and needed to ask other banks for emergency financing. All other banks declined (with good reasons, a bank falling apart combined with pending legal action on the mortgage side is a very high risk for them to take). So within three weeks DSB was bankrupt. More here: https://en.wikipedia.org/wiki/DSB_Bank https://en.wikipedia.org/wiki/DSB_Bank I can imaging some disgruntled customers going after Wells Fargo in the same way. They have severe legal action pending (which makes them risky for others to save) and have destroyed their image by their reactions to this (which makes it easier to motivate customers to take action). All ingredients that killed DSB are there... The only difference is that DSB was one of the smaller banks and Wells Fargo is huge.

gaius 10y ago
In the Netherlands a bank got destroyed a few years ago by a single person starting a media campaign for a bank-run. This was done in response to "shady practices" on the mortgage side of the bank Happened here in the UK too. Northern Rock was in trouble but companies get in trouble all the time; what killed it and precipitated a full-blown financial crisis here was certain journalists revelling in the downfall of capitalism from the safety of their state-broadcaster sinecures...
- _ak 10y ago
  Them going bust is actually a pillar of capitalism. This whole "too big to fail" bullshit coming from business-friendly politicians was just skewing the free market.
  - tdb7893 10y ago
    Weren't they actually too big to fail, though? I thought that multiple huge American banks failing would've made the recession a ton worse because banks would've failed and some large companies wouldn't have been able to make payroll and it all could've snowballed
    - rwmj 10y ago
      The trick is to let them fail, then rapidly sift through the pieces and sell anything off which still has value. Even failing banks have plenty of good loans. Ordinary deposits with banks should be protected by the government because the general public cannot evaluate the risk of a bank collapsing. There's probably a case for some protection for companies that hold accounts -- although companies should really be aware that by depositing money in a bank, they become lenders to the bank, and they should have the skills to mitigate that risk. Perhaps smaller companies, and accounts specifically holding payroll, should receive greater deposit protection.
      - tdb7893 10y ago
        That makes sense. If the government were able to do all of that super fast it might be been fine. I just don't get all of the hate for the bailouts. I know it feel's like to many people the banks sort of "got away with it" but the bailout both stopped any bad effects from failed banks and the government made money off of it so it seems like a win-win for society in my perspective
        caseysoftware 10y ago
        If it's a win-win, then it should be okay - even good! - for the banks+government to do it again. After all, everyone made money and the economy only almost collapsed, not actually. Regardless of the actual dollar amounts changed hands, what the US Federal government demonstrated was that risky - even illegal - behavior will be covered and some losses will be covered. It means that next time (and there will be one), we should assume the risks and losses will be even bigger.
        tdb7893 10y ago
        But the current system was insufficient to stop the previous failure, too. Wouldn't bailing them out short term and then adding some regulation long term be a sufficient solution?
- deleted 10y ago
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deleted 10y ago
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JustSomeNobody 10y ago
I don't see that happening in the U.S. This person's campaign would be subject to a flurry of DMCA takedown notices[0] and mafia style legal threats. [0] Legal or not.

by t0mas88 10y ago

gaius 10y ago

In the Netherlands a bank got destroyed a few years ago by a single person starting a media campaign for a bank-run. This was done in response to "shady practices" on the mortgage side of the bank Happened here in the UK too. Northern Rock was in trouble but companies get in trouble all the time; what killed it and precipitated a full-blown financial crisis here was certain journalists revelling in the downfall of capitalism from the safety of their state-broadcaster sinecures...

_ak 10y ago
Them going bust is actually a pillar of capitalism. This whole "too big to fail" bullshit coming from business-friendly politicians was just skewing the free market.
- tdb7893 10y ago
  Weren't they actually too big to fail, though? I thought that multiple huge American banks failing would've made the recession a ton worse because banks would've failed and some large companies wouldn't have been able to make payroll and it all could've snowballed
  - rwmj 10y ago
    The trick is to let them fail, then rapidly sift through the pieces and sell anything off which still has value. Even failing banks have plenty of good loans. Ordinary deposits with banks should be protected by the government because the general public cannot evaluate the risk of a bank collapsing. There's probably a case for some protection for companies that hold accounts -- although companies should really be aware that by depositing money in a bank, they become lenders to the bank, and they should have the skills to mitigate that risk. Perhaps smaller companies, and accounts specifically holding payroll, should receive greater deposit protection.
    - tdb7893 10y ago
      That makes sense. If the government were able to do all of that super fast it might be been fine. I just don't get all of the hate for the bailouts. I know it feel's like to many people the banks sort of "got away with it" but the bailout both stopped any bad effects from failed banks and the government made money off of it so it seems like a win-win for society in my perspective
      - caseysoftware 10y ago
        If it's a win-win, then it should be okay - even good! - for the banks+government to do it again. After all, everyone made money and the economy only almost collapsed, not actually. Regardless of the actual dollar amounts changed hands, what the US Federal government demonstrated was that risky - even illegal - behavior will be covered and some losses will be covered. It means that next time (and there will be one), we should assume the risks and losses will be even bigger.
        tdb7893 10y ago
        But the current system was insufficient to stop the previous failure, too. Wouldn't bailing them out short term and then adding some regulation long term be a sufficient solution?
deleted 10y ago
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deleted 10y ago

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JustSomeNobody 10y ago

I don't see that happening in the U.S. This person's campaign would be subject to a flurry of DMCA takedown notices[0] and mafia style legal threats. [0] Legal or not.