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I think you should see this more as people putting their money into different investment platforms rather than people withdrawing massive amounts of cash and ke
by devjab 3y ago
I think you should see this more as people putting their money into different investment platforms rather than people withdrawing massive amounts of cash and keeping it under their mattresses. When you invest a minimum of 100k Euro your options open up significantly in Europe. This is because our consumer protection laws have lower requirements for what is deemed semi-professional investors and up, which makes it easier for companies to be caretakers of your money.
Right now things are slowing down, and have been for a while. Not so much because demands are declining, but because interest rates are increasing. Which means a lot of people are looking to put their money into safer options than what they have been for the past decade or so. Traditionally this would have been (or at least involved) banks, but because many banks have been slow to drop their negative interest rates on in-loans, they are also very unattractive options when you're looking to store your savings. At the same time, banks have been a little slow to react to the fact that there are now a lot of stable options for those €100K+ investments because their primary focus has been on loaning and not in-loaning.
I wouldn't worry too much about the banks unless you have stock options in them or work for one. Especially if you don't have more savings than what is covered by your government. But pulling money out to keep as cash would only really make sense if you're paying a lot of money to keep them in the bank, and if that's the case, I'd probably look for a different bank first. Depending on where you live in the world of course.
- thatguy0900 3y agoI wonder what the actual process is for if your bank fails. Does the government cut you a check or do you have to wait a couple months with no access to your money before seeing any kind of insurance payout?
- devjab 3y agoI suppose it depends on where you live. In Denmark when some of our banks failed in 2007-2008 the government simply assumed ownership of the banking operation until the healthy business (regular people) could be sold and transferred to other banks. I think something similar happened with Silicon Valley bank, didn’t it? It’s typically not too disruptive for regular people. For investors, institutional loaners and people who have more money than what is covered by your country’s laws or the banks insurance, you will likely have to wait for a lengthy bankruptcy process to see what remains of your money beyond what is covered. Typically in-loans will be quite high on the bankruptcy priority list, but sometimes there won’t be enough money to cover much of it. Often there will also be various lawsuits in the wake of a bank failing, as investors try to get what they can. Where it can be severely disruptive is if your company has money in the bank exceeding the “regular people” amount. Because that would mean your company would have to wait for the bankruptcy process to obtain access to its funds.