Our Financial crisis is spreading around the globe
Yesterday, the Bank of East Asia was mobbed by panicking customers demanding their deposits. Police had to be called in to control the mob in Hong Kong.Rumors traveled like wildfire via text message, informing citizens that BEA’s exposure to failing American institutions like AIG and Lehman Brothers made it unstable. This is the first time in over a decade that this type of financial panic has surfaced in China.
Bank Chairman David Li insisted that “the rumors were groundless” but the company just revised its earnings projections down 12% after discovering an employee had buried losses from unauthorized trades. China does have a system of banking insurance similar to FDIC which insures accounts to $100,000.
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