Thai Bankers Association tells depositors not to rush to withdraw money: Rice pledging

[samuidave]

OF COURSE THIS IS THE BANKS WARNING!! THEY DO NOT WANT TO BE DESTROYED IN A FLASH!

Every bank on the planet would immediately collapse if we all asked for our deposits back.

No bank anywhere has the holdings necessary to pay of its debt to depositors. It might have 1/10th the needed amount if it is in good shape.

It's the easiest way to bring this system to its knees, but we are afraid of the after shock as the kleptocratic bankers would rally their illusion of power over us, despite their actual impotence.

[samuidave]

The Thai banking system is quite stable and there is absolutely no reason for anyone to do anything. Waste of time, waste of money.

The idiocy just keeps comin' ....

No bank in the world is stable on a bank run. A run would bring an immeidate collapse to any bank because they wealth is 90% illusory. They create money and loan money at interest out of thin air, and it is only 'faith' that allows them to do so.

Taking you on face value -- that is you believe what you printed, I am left wondering why a person who knows nothing about banking wants to voice an opinion? Absolutely amazing.

[Showbags]

Hands up who wants to go to the bank tomorrow ?

[GeorgeO]

If only they'd just kept quiet . . . now that run is starting . . .

As I said when it was first mooted, a run on any bank that suggested it might provide support to this corrupt scheme could see said bank disappearing...!

[Mosha]

If only they'd just kept quiet . . . now that run is starting . . .

Exactly. When a bank says don't panic, it's time to get your money out. I took all my savings out of the Krung Thai bank yesterday and many other people were doing the same.

I was at a branch of that bank yesterday on an errand and the bank was packed with Thais. Waited 20 minutes to get served, but I was told by someone that it was because it was the beginning of the month. Now I'm not so sure. Maybe I'm developing paranoia!

A bank run is dangerous but its the gold shops should be watched too.

If there is a run on gold here in Thailand that is when the government will probably step in like in India.

I went to laos and that was a real banana state. The money being handed over the counter for gold was in massive block of cash form.

Wouldn't they go from the bank to buy tong?

[Gweiloman]

The Thai banking system is quite stable and there is absolutely no reason for anyone to do anything. Waste of time, waste of money.

The idiocy just keeps comin' ....

No bank in the world is stable on a bank run. A run would bring an immeidate collapse to any bank because they wealth is 90% illusory. They create money and loan money at interest out of thin air, and it is only 'faith' that allows them to do so.

Taking you on face value -- that is you believe what you printed, I am left wondering why a person who knows nothing about banking wants to voice an opinion? Absolutely amazing.

My thoughts exactly. Why are you voicing your opinion?

[SantiSuk]

Don't panic Captain Mainwaring!! [expresses exaggerated signs of panic]

[mancub]

I don't like being " warned" not to withdraw my money . Almost implies some kind of associated threat !

[noitom]

BIS ratios mean a lot to 40 million Thai poor.

[englishoak]

That was the last straw for my household, just been down and withdrawn all our savings from Thai banks, keeping cash in a heavy secret safe for the time being. More than a few people down there doing the same. Mild panic would accurately describe the poor bank staff.

Cleared my accounts last week of all but slush and moved the business one for safety on the advice of a family member and ex Bangkok International bank, he was pretty high up and moved his savings last week to singapore...

A run on a bank or banks here with the way people group think and can knee jerk react just isnt worth the risk of ignoring. All banks are at risk if theres a run as none carry sufficient funds to cover. At present not clear the powers a caretaker gov would have to add liquidity if required in a crisis.

I believe they also dropped the insurance down drastically in about 2012 from 50m to about 5 or something so its a no brainier imo, can always move it back later again.

[chiang mai]

Deposit Protection hasn't changed, it remains at 50 mill and is not reduced until 2016.

http://www.dpa.or.th/main.php?filename=index#language

[englishoak]

Deposit Protection hasn't changed, it remains at 50 mill and is not reduced until 2016.

http://www.dpa.or.th/main.php?filename=index#language

Excellent id not noticed it had been extended .. very good, still need operational liquidity rather than any tie up risk though but its great to know for fixed term bonds. thx

[slipperylobster]

Well, in the west, people panic and pull out of investments at the drop of the hat. Just as a snowball grows larger, as it rolls downhill, markets do the same. Now, if people even "think" there might be a problem, this could end up with lines outside the banks as well. It does not matter what the actual truth is...does it? It only becomes a matter of protecting your money before you get locked out. I just wired over a bunch, and am not happy, but will not run down to pull it out. Possibly withdraw more from the ATM and hold some for next month. I am sure others will do the same. I do worry about people who have their life savings/retirement nest all in a Thai Bank. Not quite the time yet to lock up all your cash in a baht account at a bank here in Thailand, while there are other "safer" banks.

Fear mongering is one thing.....just protecting yourself against the worst possible case is smart.

[slipperylobster]

I don't like being " warned" not to withdraw my money . Almost implies some kind of associated threat !

Government must come up with a quick plan....whoever protects the banks from a run is capable of winning votes.

[chiang mai]

When the herd gets scared and starts to withdraw funds from banks it can become a self fulfilling prophecy, it would be one thing if each member of the herd was acting on their own assessment of particular banks balance sheet and making a conscious decision to move their funds. But that's not what happens, what happens is people develop an irrational fear and do what they think others are doing without even knowing what a balance sheet is, that in itself helps an otherwise healthy bank to fail.

[slipperylobster]

Today, I want to see what happens to the baht exchange rate.....and gold prices.

[chiang mai]

GBP/USD weakened over the past couple of days and that gave the appearance that THB was getting slightly stronger. it picked up by about one baht. If USD continues to strengthen and if GBP suffers any further negative economic press, I expect THB to stay around its current levels or stronger - BOT does not appear to have intervened in the market for several weeks so I wouldn't get too excited at the prospect that THB will weaken much at all.

[Ricardo]

Today, I want to see what happens to the baht exchange rate.....and gold prices.

One thing you can always rely on, the TAT will announce how good this all is for tourism (and actually, a weaker Baht would be good !), and that tourist-arrivals are up 10.254 % !

And another is that at some point in the very-near future, former-DPM Chalerm will announce that he's been put-in-charge, & will solve everything within 90-days.

Meanwhile I will need to withdraw cash for a land-purchase later-today, but have no real concern, that the bank will turn us away. 'Keep Calm & Carry-On Banking !'.

[TallGuyJohninBKK]

Deposit Protection hasn't changed, it remains at 50 mill and is not reduced until 2016.

http://www.dpa.or.th/main.php?filename=index#language

No... that's not correct, according to the DPA website.

The government deposit insurance against bank default is set to drop from 50 million baht now to 25 million baht on Aug 11, 2015, and then further down to 1 million baht per bank, per depositor on Aug. 11, 2016.

The amounts had been set to reduce earlier, but somewhere along the way, the government decided to extend the current 50 million per bank, per depositor coverage for a longer duration.

http://www.dpa.or.th/main.php?filename=index___EN

[chiang mai]

....and?

[TallGuyJohninBKK]

Deposit Protection hasn't changed, it remains at 50 mill and is not reduced until 2016.

The text of your post above said the coverage amount would not reduce from 50 million until 2016.

And I was pointing out, it will reduce below 50 million in 2015... a year earlier than your post.

Edited February 6, 2014 by TallGuyJohninBKK

[chiang mai]

OK fair enough, my verbiage was not precise but the principle of above average coverage remains intact and is not at the low levels dreamed by some posters.

[TallGuyJohninBKK]

I wouldn't exactly call people's expectations/perceptions of much lower government deposit insurance cover by now as "dreamed."

In fact, under their original plan, the government's deposit insurance would already have been cut to 1 million baht per bank, per depositor by now. The original change date to that amount was to have been August 2012, about a year and a half ago.

There was a good deal of attention and publicity about that amount and then impending date, because the 1 million baht works out to only about $31,000 U.S. per bank, per depositor. And that's a pretty measly amount in the global scheme of things for bank deposit insurance.

Obviously, some part of the Thai government re-thought that original schedule and probably rightly figured that such a low level would cause some adverse effects in the Thai banking market. But at least, if they still go to 1 million in 2016 as currently planned, it will at least be enough to cover people's 800,000 retirement extension deposits -- assuming the required amount doesn't increase between now and then.

Edited February 6, 2014 by TallGuyJohninBKK

[chiang mai]

But the reality is that the higher insured amounts remain in effect, it's wise to keep a weather eye on what happens to the limits but it's unproductive and unhelpful to worry about what they might be in in the future.

[TallGuyJohninBKK]

For me, the most salient point is, I believe, ever since the DPA was created in the wake of the Asian financial meltdown, there hasn't been any big episode where a bank has failed and the DPA has had to pay out. So, while we know the law and regulations, there isn't much of a track record here of just how the DPA process would work in reality, should it ever be needed.

I was intrigued by the post from the member above who recounted having his Thai bank deposits at the time of the Asian financial meltdown -- pre the creation of the DPA -- frozen for something like three years before finally getting his funds restored. Hopefully, the DPA if needed would turn in a better performance. But the way this government operates, I wouldn't be betting a lot of my money on it.

The other point is, I'd never keep any funds in any bank, Thailand or otherwise, in excess of whatever the government insurance program protects. And in my personal case and opinion for Thailand, I'm not a big fan of keeping ANY significant money in ANY Thai bank, because I don't believe the financial system here has any inherent integrity and you can't believe what the goverment says in the slightest. And that was before the current rice payments fiasco.

Edited February 6, 2014 by TallGuyJohninBKK

[chiang mai]

For me, the most salient point is, I believe, ever since the DPA was created in the wake of the Asian financial meltdown, there hasn't been any big episode where a bank has failed and the DPA has had to pay out. So, while we know the law and regulations, there isn't much of a track record here of just how the DPA process would work in reality, should it ever be needed.

I was intrigued by the post from the member above who recounted having his Thai bank deposits at the time of the Asian financial meltdown -- pre the creation of the DPA -- frozen for something like three years before finally getting his funds restored. Hopefully, the DPA if needed would turn in a better performance. But the way this government operates, I wouldn't be betting a lot of my money on it.

The same is true of most Western countries also, these things are insurance policies that have rarely been tested, but that's no reason not to trust them otherwise we wouldn't invest anywhere, their very existence helps ensure that players remain balanced and inspire confidence.

[Showbags]

Anyone else go to the bank today ?

[chiang mai]

Anyone else go to the bank today ?

Yes, I set up another "standing order" and withdrew 10K, it's a good time to go shopping, plenty of bargains to be had.

[metisdead]

An offensive and profane post has been removed.

[zydeco]

Anyone else go to the bank today ?

Yes, I did.