A suitable song title for news, via Yahoo and Drudge, of a bank-run panic in Latvia. Yes, yes, I know Latvia isn't very big but neither was Iceland or Ireland in the great scheme of things but look where that led! Anyway, the biggest bank in Latvia, Swedbank, has depositers queuing up at branches and cash machines in an effort to get their money out. It's only fair to point out that the recent history of Latvian banking has not been happy:
Latvians are particularly sensitive to speculation about banks' health. Latvijas Krajbanka, the country's 10th largest bank, was nationalized last month after regulators discovered evidence of massive fraud allegedly carried out by the bank's former owner, Russian businessman Vladimir Antonov. Depositors were deprived of access to their funds for days.
And three years ago the country's second largest bank, Parex Bank, entered technical default and had to be taken over by the government, which in turn forced Latvia to appeal to international creditors and the European Union for a €7.5 billion ($10.5 billion) bailout.
So far the panic has not spread to neighbouring Estonia or Lithunia where Swedbank has other branches. Apparently the rumours started last week and went viral over the weekend, I guess with the 'help' of the internet.
Swedbank passed the European Banking Authority's most recent stress test, the results of which were announced in July.
Oh, good, so that's alright, then!
It might not be too far off here. I heard that a colleague at work is very happy that he has managed to get his hands on 17 ounces of gold. And I have starting-blocks at the front door so I can be first in the queue to pay off the mortgage with ISAs and shares. With on-line banking, of course, you don't even have to stand in the cold and listen to the neurotic chatter of other panicking disinvestors.
Posted by: Whyaxye | Monday, 12 December 2011 at 19:39
That's true, 'W', but where the hell do you switch it to that's safe these days?
Posted by: David Duff | Monday, 12 December 2011 at 22:07
Don't Latvians have oodles and boodles of reindeer?
Don't forget, Santa's putting the final touches on the naughty and nice list - reindeer look good in the short term.
Posted by: JK | Monday, 12 December 2011 at 23:14
JK
It is the Lapps in Finland who have oodles and boodles of reindeer. I got a problem. I heat with gas, what am I going to do with the lump of coal Santa has for me?
Posted by: Hank | Tuesday, 13 December 2011 at 06:04
Hank, put it in a sock and use it as a weapon when the peasants revolt.
Posted by: Andra | Tuesday, 13 December 2011 at 07:05
"That's true, 'W', but where the hell do you switch it to that's safe these days?"
Well, if I knew that...
In my case, I still have some mortgage to pay off, and so it will make sense to pay for the bricks and mortar and forgo the savings and extra income. Beyond that, I think it is best to reconcile oneself to frugality so that if the worst happens, one can retain some equanimity.
Posted by: Whyaxye | Tuesday, 13 December 2011 at 09:05
Hank - a lump of coal?
On Saturday in the local "Christmas Market" there was a stall selling sculptures made from carved coal. At around £15 a lump. My first thought was "There's some serious added value!". And the second thought was "What recession?!".
Posted by: Whyaxye | Tuesday, 13 December 2011 at 09:10
I posted our mortgage cheque on Saturday. The money had been sitting in cash in a stockbroker's account: the MF Global fiasco in the US persuaded me that that was not a good idea.
Posted by: dearieme | Tuesday, 13 December 2011 at 14:52
Good thinking, DM, but now, can I interest you in some Eurobonds, one careful owner, hardly used, very reliable . . .?
Posted by: David Duff | Tuesday, 13 December 2011 at 17:17