Here in China, all of us (I mean, everyone) use apps like Alipay and WeChat for purchases of basically everything. These are linked with bank accounts. So, a full run of the banks might not occur as opposed to a country that doesn't have the cashless payments already set up here. I do see bank runs on certain banks, however, but they will invariably have to deposit into another Chinese bank account to be able to buy food, pay for bills, Didi's, flights, trains, etc. I think you are correct about their fear of a bank restructure is admission of weakness and poor governance, so they want to avoid that. Interesting to see what they do. Indeed, here it 'looks' like things are well, but I fear the reality is much worse. I just wanted to highlight that potential barrier to a multi-bank run. I think that kind of thing can happen more likely in USA, Australia, EU, etc where the cash system is still in full force. To withdraw cash out of electronic apps (as mentioned) actually disables you here. So that is a safeguard for the banks. The question this is: many banks --> few large player banks where all cash deposits will be used to link with payments.... The wallet function in both Alipay (Alibaba Group) and WeChat (Tencent) might also be another catalyst, as you can 'withdraw' funds into their wallets - effectively putting money in these corporates, as opposed to the banks themselves. That could be an interesting de-stabiliser. Anyway, keep up the good work! Just wanted to express my thoughts on this matter.
No comments:
Post a Comment