Economic Crisis

Korean Bank Run Spreading: Eighth Bank Closes Following ?Massive Withdrawals?


Kim Seok-dong, chairman of the Financial Services Commission

The quietest bank run that has so far completely evaded mainstream attention, that of Korea, is spreading, and an eighth bank has now shuttered after “Domin Bank, a savings bank with a capital adequacy ratio below 5 percent, voluntarily decided yesterday to suspend its operations temporarily because of massive withdrawals.” As JoongAng reports: “The decision took both depositors and financial regulators by surprise since it was the first time that a local bank shut its doors on its own.” Apparently the courageous decision by the Financial Services Chairman Kim Seok-dong to deposit $17,864 in a troubled bank has not done much if anything to prevent the locals from realizing that their banking system is built on a house of cards.

From JoongAng Daily:

Domin Bank, which has six branches in Gangwon, was placed on a watch list last week by the Financial Services Commission. The move triggered a bank run on Domin Bank.

According to Domin Bank, deposits amounting 31.8 billion won ($28.2 million) were withdrawn since last Thursday, including 18.8 billion won on Monday.

The news of Domin Bank?s temporary closure came as FSC Chairman Kim Seok-dong was visiting Mokpo, South Jeolla, where recently suspended Bohae Savings Bank is located.

Seok-dong unhappy:

?This savings bank was supposed to submit a management improvement plan to the FSC by Feb. 24,? said Kim. ?We will now have to review whether [the closure] is even legally O.K.?

More classic quotes follow:

Bae Joon-soo, senior FSC deputy director, said, ?I think it is legally and morally wrong for a financial firm to do such a thing.?

Now we get it: according to the banking cartel’s ethical standard it is “legally and morally wrong” for a bank to admit it is insolvent. Perhaps if America had made this clear 2 years ago, we could have spared ourselves two years of fingerpointing and fictitious lawsuits. After all, say what you will about the tenets of banker national socialism, at least it’s an ethos.

The financial regulator and the Federation of Savings Banks failed to persuade Domin Bank to resume its operation yesterday.

The bank in notices posted on the doors of every branch said that it had taken the move ?as a means to soothe the crisis involving massive withdrawals.?

The notice continued, ?We will resume operation after we are reborn as a sound savings bank by increasing our paid-in capital to achieve a capital adequacy ratio of 8 percent.?

We repeat our appeal for the FDIC and Treasury to send our crack fraud and book cooking team to guarantee to the Koreans that their bankrupt banks are perfectly ok before this thing gets really out of control, and migrates to China, where a billion man bank run will be a little harder to keep under wraps.

Previous ArticleNext Article

1 Comment

  1. To me it just goes to show how unsafe the banks really are, and totally untrustworthy. As the article says they are founded on a deck of cards. Last year we met a bank manager who told us that she used to like the banking industry as the banking motto used to be
    ” We the banks are there to serve the customers”. She told us that she left the banking business because the banks have changed their motto to ” The people are there to serve us”

Leave a Reply

Your email address will not be published. Required fields are marked *

Send this to friend

By continuing to use this website I accept the use of cookies. More information

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies from this website. If you would like to change your preferences you may do so by following the instructions here