Would a mass cash withdrawal bring down the banks?

No. Banks have to hold a reserve, and not many people are going to do this to bring down the banks. Why would anyone want to throw away their savings? This is a meaningless act.

I can’t speak for the U.K., but yes, a bank doesn’t have to comply immediately with a request for a very large cash withdrawal. (And no, I don’t remember the amount.) Bank branches are allowed to only keep a certain amount on hand, so they cannot honor every large cash withdrawal request.

And what @wundayatta said. :)

Yeah, Cantona was never the sharpest tool in the box. Seagulls & sardines….blah blah blah.

Actually yes, you could bring down the bank. It’s call a run on the bank. Generally if the public loses confidence in a bank, they may try to move their money to another institute. If enough people do this there is not enough cash to fund the withdrawals. Remember that banks hold a certain percentage of their assets in cash. The rest is held in longer term investments such as loans. Once the cash runs out the long term investments can’t be converted fast enough to make the payments and the bank goes bankrupt.

FDIC insurance was created to prevent this by insuring deposits up to $250K (in the states, I don’t know what Britain has). Nonetheless, if panic sets in and depositors are afraid of losing their money, it can happen. In fact in 2008 Charles Schumer was blamed for causing a run on IndyMac by publishing a letter that said it would fail. This caused a run on the bank which did indeed, make it fail.

@ucme – “when the seagulls follow the trawler, it is because they think sardines will be thrown into the sea”.

@Mat74UK That’s the one. Great player, actually played for my team until those bastards…..Man U pinched him from us. One crazy fella.

@ucme – the team you talk about used to be my local premiership team until they pressed the self destruct button. No the most local top league team is a long long way away!

Oh yea, this would totally work, the tax payer has never been made to bail out the banks before. banks stand or fall on their own merits, thats how it works.

The idea is doomed to fail, but regardless of my previous sarcastic mockery, I would still be all for it. Anything that shows we are not going to take shit from them. They ask for a bail out one year, and the next they give all their top guys 6 billion bucks in bonuses, they are taking the piss out of people.

If everyone tried to take out all their savings at once, I bet you would find the banks dont have enough money to give everyone their cash. Too much of it is tied up in bits of paper, i really dont think, despite all the regulations, that they actually have enough physical money to cover all their clients.

@poisonedantidote – Just what I was thinking

@ucme Would that be pinched as in ‘paid the asking price’? Blame Wilkinson for being so stupid to sell him for a song, or Leslie Ash for certain alleged indiscretions.

I am not real sure what some of you are thinking. If everybody ran to the bank and withdrew their money, there would not be enough cash to cover. Banks operate on the assumption that at any given time time people are putting money in and taking it out. They borrow cash if they need it, but there is less cash that there is wealth. A run on the banks would bust them, and leave a lot of people with nothing to withdraw. Only a fool would think that it would punish the bank. It would punish you.

Yes, the government FDIC only has about $50 Billion in guarantee funds, and there is about $1 Trillion on deposit. They do have the right to refuse access to your funds, or give you an IOU. Read your bank account contract.

@YARNLADY

Yep, and yikes!

I have already undergone 3 mergers in the last 4 years or so…at one point I didn’t exist in the system.

That was a humbling moment. lol

Its time to put an end to the days where Banks can make money work for them.
A new economy needs to be born where Banks can only lend what they have on hand.
This will virtually halt most American “growth”. (Or in your case, British growth).
Good.
We can’t grow forever.

And a bank that only lends what it has can never be run on.

I know I sound like an idiot to economists, but the last few years prove most mainstream economists are not very intelligent themselves.

And yes, a mass cash withdrawal would either bring down the banks, or lock up the government in trying to save such banks.

@meiosis Hardly the asking price £1million?!? Wilkinson was a complete muppet for gettin rid though. Yeah Mr.Chapman, good goalscorer twat of a husband.

Take

http://en.wikipedia.org/wiki/Northern_rock_bank

as an example which happened in the UK in 2007.

the coordinated effect would seal it, mass online withdrawls, mass in house withdrawls, and the additional selling of all stocks and the cashing in of retirement accounts, coordinated, the banks would refuse the people would protest and thus demand the dough, and then national protest by refusing to pay mortgages, rents, gasoline, food, clothing, all of it. you mess with someones money by refusing to give them the money that is there’s, anger leads to refusal, refusal leads protest, leads to mass non payment of all services. conditions are the complete elimination of corporate and pac money in government, the ammendments to the constitution outlawing the political motives of one bribed party messing with the other bribed party and locking up the progress of TAXPAYER FUNDED LAWMAKING. or complete overhaul of govt and the forced withdrawl of the money from banks, wall street, corporations, and the fedral reserve, THE TEA PARTY ALREADY IS IN PLACE, 50 million right there…...more than willing to ELIMINATE THE FEDERAL RESERVE. GOES WORLDWIDE, NEW WORLD ORDER DESTROYED…instantly

Don’t want to live in that world! ^^

X2 @wundayatta.

Me thinks that if the banks realized a run was on they’d lock the doors until everybody got their heads back on straight.