ECB Reportedly Looking At Bank Runs in Social Media Age

Reuters reporting the ECB is starting to revisit the liquidity question:

"ECB ASKS SOME LENDERS TO MONITOR SOCIAL MEDIA TO DETECT BANK RUNS -SOURCES - RTRS

- REGULATORS ALSO LOOKING AT THE LENDERS' INDIVIDUAL DEPOSIT BASES - EXECUTIVE”.

• This follows the runs on banks such as Silicon Valley in Mar-23. The previous major bank run was Northern Rock in Sep-2007 where it saw as much as 5% of the deposit base leave in a single day. Liquidity requirements were totally overhauled (LCR and NSFR) in the wake of the Global Financial Crisis. Silicon Valley then saw 30% of its deposit base leave in an afternoon, according to some reports.
• Much as requirements were recalibrated globally in the wake of last year’s events, the confidence factor around the whole structure of a fractional banking system remains key and can be threatened by a concerted social media campaign… at least that’s the fear.
• Most central banks and regulators globally have made it clear that there’s an explicit guarantee that depositors are protected to a ceiling but that there’s an implicit guarantee beyond that, egregiously so in the case of Silicon Valley. The ECB revisiting this issue is likely to be a case of regular housekeeping rather than foretelling any sea change in liquidity regulation, we feel.