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It would appear the fears of a global bank run are spreading. From HSBC’s limiting large cash withdrawals (for your own good) to Lloyds ATMs going down, Bloomberg reports that ‘My Bank’ – one of Russia’s top 200 lenders by assets – has introduced a complete ban on cash withdrawals until next week. While the Ruble has been losing ground rapidly recently, we suspect few have been expecting bank runs in Russia. Russia sovereign CDS had recently weakned to 4-month wides at 192bps.
Lender has introduced complete ban on cash withdrawals until end of week, news agency reports, citing unidentified person in call center.
Bank spokeswoman declined to comment by phone
My Bank is top 200 lender by assets: Prime
NOTE: Central bank has revoked about 30 banking licenses since July 1 when Elvira Nabiullina succeeded Sergei Ignatiev as governor, compared with three in the firt half of the year
Interestingly, Russia’s biggest lender Sberbank has seen a 8.7% rise in deposits in December… it seems the Russian’s are realizing that bank deposits are nothing more than risky loans to highly levered entities…
While last night’s almost unprecedented reverse repo liquidty injection into the Chinese banking system stopped the bleeding of short-dated money-market rates briefly, the likelihood remains that a shadow-banking system default will occur: As CASS’s Zhang noted:
- *CHINA TRUSTS AND SHADOW BANKING TO SEE DEFAULTS IN 2014: ZHANG
- *CHINA SHADOW-BANKING DEFAULTS WOULD BE GOOD THING: CASS’S ZHANG
Perhaps that explains why China’s CDS spread remains at its highest since the summer credit crunch, barely budging on last night’s cash drop. At double the default risk of Japan, China appears far from out of the contagion fire.
China’s risk makes the US debt ceiling debacle look miniscule and while liquidity does not reign supreme in these markets, the last few months have seen considerably more activity in Asian sovereign CDS…
China’s Academy of Social Sciences Zhang Ming had a few other things to say…
- *CHINA EXPORTS MAY NOT BE AS GOOD AS MARKET EXPECTS: ZHANG
- *CHINA MONETARY POLICY TO REMAIN RELATIVELY TIGHT IN 2014: ZHANG
- *YUAN APPRECIATION COMING TO AN END, CASS’S ZHANG MING SAYS
- *YUAN MAY WEAKEN AFTER REACHING 6 PER DOLLAR: RESEARCHER ZHANG
and typically is seen as yet another mouthpiece for the administration… so that won’t please Schumer and his crowd…