World View: HSBC Cash Withdrawal Restrictions Raise Fears of Bank Runs

World View: HSBC Cash Withdrawal Restrictions Raise Fears of Bank Runs

This morning’s key headlines from GenerationalDynamics.com

  • 29 die in clashes at three-way commemoration of Egypt’s revolution
  • HSBC cash withdrawal restrictions raise fears of bank runs
  • Ukraine anti-government protests continue, despite offer of compromise
  • France’s president Hollande announces end of relationship with Trierweiler

29 die in clashes at three-way commemoration of Egypt’s revolution

 Supporters of Egypt's government cheer with national flags (Al-Ahram)
Supporters of Egypt’s government cheer with national flags (Al-Ahram)

Clashes killed 29 people, as hundreds of thousands of Egyptians tookto the streets on Saturday to commemorate the third anniversary of theJanuary 25, 2011, Egyptian Revolution, which resulted in the ouster ofHosni Mubarak. However, the demonstrators today are not nearly asunited as they were in 2011. On Saturday, there were three distinctgroups of demonstrators:

  • Pro-government demonstrators, many waving Egyptian flags around Tahrir Square, and many calling for General Abdel al-Fattah al-Sisi to run for President of Egypt.
  • Muslim Brotherhood supporters, demanding that Mohamed Morsi, ousted by an army coup on July 3, be reinstated as Egypt’s president. Several MB supporters were killed or arrested on Saturday.
  • Secular and independent groups, opposed to both the Muslim Brotherhood and the military government.

The only ones allowed into Tahrir Square were the pro-governmentdemonstrators. However, all three groups were marching, and the armyused teargas and birdshot to disperse the crowds. 29 people died inthe resulting clashes.

Today the major debate in Egypt is whether the country if better offor worse off than under Mubarak. Al-Ahram (Cairo) and BBC

HSBC cash withdrawal restrictions raise fears of bank runs

Some customers of London-based international banking firm HSBC arebeing told that they can’t make withdrawals above $5,000 or so withoutbeing questioned about the reason for the withdrawal. In some casesthe bank has been demanding documentation before the withdrawal can bepermitted, although they now say they’ve reversed that policy.

HSBC is saying that they’re just trying to protect their customers,and they issued this statement:

“We ask our customers about the purpose of large cashwithdrawals when they are unusual and out of keeping with thenormal running of their account. Since last November, in someinstances we may have also asked these customers to show usevidence of what the cash is required for.

The reason being we have an obligation to protect our customers,and to minimize the opportunity for financial crime. However,following feedback, we are immediately updating guidance to ourcustomer facing staff to reiterate that it is not mandatory forcustomers to provide documentary evidence for large cashwithdrawals, and on its own, failure to show evidence is not areason to refuse a withdrawal. We are writing to apologize to anycustomer who has been given incorrect information andinconvenienced.”

This announcement is triggering visceral fears of bank runs among alot of people who remember the Cyprus bank bailout last year that keptpeople from withdrawing more then 300 euros per day, and permanentlycost large depositors 40-80% of their deposits.

It’s also reminiscent of HSBC’s 2007 announcement that it had $1.75 billion in bad debts, resultingfrom bad subprime mortgages written by subsidiary Household FinanceCorp., which HSBC had acquired in 2003.

Then, last year, HSBC was found to have, for five years, beenlaundering billions of dollars for Mexican drug mobs, organizationslinked to al-Qaeda and Hezbollah, and Russian gangsters.

So is HSBC in trouble again? Or are these new policies really allabout protecting their customers? I guess each depositor will have tomake his own decision. BBC and ZeroHedge and Rollin Stone (Feb 2013)

Ukraine anti-government protests continue, despite offer of compromise

Anti-government protests in Ukraine are spreading from the capitalcity, Kiev, into cities in the western part of the nation. WesternUkraine is populated by ethnic Ukrainians, who largely oppose thecurrent Russia-linked government, and who want Ukraine to have closerties to Europe. Eastern Ukraine is populated by ethnic Russians, whoprefer closer ties to Russia.

Protests in Kiev are large, but remain mostly peaceful. PresidentViktor Yanukovych offered several concessions to the opposition,including the appointment of anti-government activists to ministerialpositions in the government. However, the opposition is demandingthat Yanukovych step down, and that new elections be held. BBC

France’s president Hollande announces end of relationship with Trierweiler

Valérie Trierweiler, 48 (left) and Julie Gayet, 41 (AFP)
Valérie Trierweiler, 48 (left) and Julie Gayet, 41 (AFP)

France’s President François Hollande reportedly met for lunch onThursday with his girlfriend Valérie Trierweiler, who has lived withhim in the Élysée Palace since he took office last year. OnSaturday, Hollande called an AFP reporter and gave this quote:

“I wish to make it known that I have ended mypartnership with Valerie Trierweiler.”

This harsh statement indicates that the luncheon meeting was not apleasant one.

The announcement comes just as Trierweiler is just about to leave forIndia on a humanitarian trip, and a couple of weeks before Hollandewill be making a state visit to the United States. ApparentlyTrierweiler will still go to India, but will not accompany Hollande onthe state visit. Trierweiler is expected to resume her career as ajournalist.

Trierweiler’s relationship with 59 year old Hollande unraveled quicklyafter press reports two weeks ago indicated that Hollande was spendingnights with an actress, Julie Gayet. Trierweiler and Hollande sharesomething in common: She’s France’s least popular “first lady” indecades, while he’s the least popular prime minister in decades. Itis not expected that Gayet will move into the Élysée Palace. AFP and Telegraph (London)

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