UK Bank Clients Making ‘Silent Runs’ On Deposits
Banks have always lent more than their clients hold on deposit, leaving the risk that none would have enough cash to pay out if they all turned up at once. Back in the 1930s, depositors faced losing all their money if a bank collapsed.
Attilio Vianello, now 98, remembers how in the 1930s he had just started a job at Credito Veneto, a small bank based in Padoa, Italy, as the crisis spread beyond Wall Street to Europe.
"Banks were going bust from one day to another and the vast majority of people did not manage to rescue their savings because once they knew, it was too late. They would find the doors already shut," he recalled.
The electronic equivalent of this would be a server failure, or a Web site shutdown. But executives point out that in any silent run -- made possible by electronic money transfer whether through the internet or wholesale networks -- the most damaging aspect is the speed at which business customers can move.
Icesave web site is still down ... i think we can safely say that they are the first bank to go bust - 2008 style. See article below.