Surely it’s illegal to cause a run on a bank?

[Treeli]

Anyone else seen the FB post about Metro Bank? It’s gone viral with loads of people saying they are taking their money out today because they are going bust (completely ignoring the fact your money is protected up to £80000 even if they did go bust)

Causing a run on the bank isn’t going to help the situation!

Nice try Metro Bank short seller

Nice try Metro Bank short seller

And the obvious solution would be to post on here

If it is, you're breaking the law too. 🤔

The FCA have been investigating them. They have until the beginning of January to secure funding.

😂👌

No just bemused at the amount of people running to the bank to remove their money because of a panic on Facebook. I trust people on here to have more critical thinking

How would removing your money from the bank be made illegal?

Who would want to keep their money in a bank that’s going out of business? Even if the money is protected it’s going to be tied up for a while, won’t be available for access for bills, acct won’t be available for pay to go in etc. No way I’d be keeping my money in a failing bank.

And a lot of people have more than 80k in the bank.

Why would you have more than 80k in the bank? Unless you're imminently purchasing a house or something.

Causing a run on a bank isn't as simple as just withdrawing your money.

Banks don't have your money all nicely piled in a safe box waiting for you and everyone else. They bet on only a certain percentage wanting to take out x amount at any given time. So there is always money to take, just not "techincally" yours.

A run on the bank causes panic, making consumers want to take out their funds, and it becomes a bit of a self fulfilling prophecy. You create panic theres not enough money to go round, which means people go get out their money, because they dont wants THEIRS lost, which in turn means a (much) higher than predicted amount is taken out, which the bank hasn't got the available funds to cover.

You can't really be the sole cause of a run, its rumours, sometimes founded in truth, which cause panic. One person panicking is of no consequence, probably even 100 panicking isnt a worry but 1000s, who do you blame? The 1st person who shared it, or 501st?

It's a bit northern rock sounding to me. In my experience people who have more than the 85k limit spread it out between different banks but they need to be mindful of linked banks. People who have sold a house or inherited a large sum are entitled to a temporary high balance cover of up to a million for 6 months so most people will be fine but yes people panic and move their money.

Why would you have more than 80k in the bank

Lots of reasons. Receipt of pension lump sum, savings for retirement, people who have sold a house and downsized, people with good mortgage rates who put the money into savings because the interest rate is higher than their mortgage rate. Lottery winners, high earning high spending people who need lots of liquid assets.

People who are about to pay for extremely expensive holidays and/or weddings - there was someone who'd lost an £80k wedding package in Cyprus when Thomas Cook went bust.

Yes, pensions and investments are likely to grow more than cash in the long term, but people sometimes need a decent chunk of cash in the short term and don't want to have to take it out of an investment at the wrong time when the market is down.

Why would you have more than 80k in the bank?

Savings accounts? Not going to keep that under a mattress.