🏦 While its speedy demise was ostensibly triggered by its decision to raise funds through a sale of shares, only in the era of social media could a bank fall so quickly 🔎 Big Read by Eve McGowan
While its speedy demise was ostensibly triggered by its decision to raise funds through a sale of shares, only in the era of social media – where lightning fast messages caused panic to sweep through depositors like wild fire – could a bank fall so quickly. The irony is that the overblown tweets about the inevitability of a bank run only served to make a bank run unavoidable.
“In economic terms, it’s a bit like sitting in a dark building and someone’s shouting fire – there’s a scramble to get to the exit and you end up with a self-fulfilling prophecy with investors rushing to take money out of the bank,” says AJ Bell investment director, Russ Mould. “The banks have to sell assets to cover deposits so they have less money to lend which in turn inspires less confidence.”
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