Wednesday, March 26, 2014

Hundreds rush to rural Chinese bank after solvency rumors

March 25, 2014

Hundreds of people rushed to withdraw money from a branch of a small Chinese bank after rumors spread about its solvency, reflecting growing anxiety among investors as regulators signal greater tolerance for credit defaults.

Credit: kongharald / Flickr
Credit: kongharald / Flickr

The case highlights the urgency of plans to implement a deposit insurance system to protect investors’ deposits in case of bank insolvency, given that Chinese are growing increasingly nervous about the impact that slowing economic growth will have on the viability of financial institutions.

Regulators have said they will roll out deposit insurance as soon as possible, without giving a firm deadline.

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