Born To Run

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Why, it’s just like old times.
There is a run on Hong Kong’s Bank of East Asia (BEA). It started, apparently, on Tuesday night with the dissemination of anonymous text messages that suggested the bank was on the verge of collapse. The next day, thousands were queuing at branches all over the city to withdraw their money.
It should be said that the doughty BEA has a capital adequacy ratio nearly twice that required by law—meaning that its finances are sound. But at the same time, this is the post-Lehman world, and the average customer—in the deep reptilian recesses of the brain, behind those darting agitated eyes—does not really believe that everything is OK. The South China Morning Post quoted one depositor, a Mr Lam, as saying “I don’t think the bank has a problem and I think the system is still healthy.” He nonetheless withdrew his thousands. Another depositor, the octogenarian Mr Wong, said that he did not know why people were queuing but “I just want my money.” Still another: “It’s not normal what is happening in the world. Who knows if [official assurances] are true?”
Hong Kong hasn’t had a good bank run for a while, and there’s something vaguely comforting and nostalgic about seeing one again. It’s a great Hong Kong sport—in fact the Post rightly calls Hong Kong “the spiritual home” of bank runs. You can read wonderful descriptions of them in James Clavell’s Noble House or John Gordon Davis’ Years of the Hungry Tiger.
In the 1980s, a total of eight banks collapsed. The early 1990s saw runs on the Standard Chartered Bank and Citibank. But the golden year of runs—and they are not just directed at banks—was 1997-8. That year, recounts Rowan Callick in Comrades and Capitalists, there was a run on the International Bank of Asia, apparently triggered by somebody standing on the street shouting warnings over a mobile phone. Next, branches of the St Honore bakery chain were thronged by mobs wanting to use the firm’s gift certificates in advance of its rumored collapse. Finally, a run on Whimsy amusement arcade trinkets caused Whimsy shares to plummet by 20%.
Incidentally, the St. Honore run virtually replicated a run on the Maria’s Bakery chain in 1984, and allows Hong Kong to claim the distinction of being the only city to have experienced two runs on patisserie chains. There is plainly some Ph.D. to be written on the correlation between the Hang Seng Index and cake. Budding doctoral candidates in search of background reading may care to start here.