The Twitter Generation's Bank Crisis: A Different Kind of Pressure.
10 April 2023The changes in the banking industry since the 2008 financial crisis, highlight the impact of social media, online banking, and regulatory changes on banks' vulnerability to rumors and runs. The rise of social media has made it easier for rumors to spread and funds to be withdrawn quickly, while mobile banking has made online transactions more common than in-person transactions. Despite these factors, regulatory changes have made the banking system more resilient, such as increased capital buffers and lower leverage ratios. The blog emphasizes the importance of maintaining trust and confidence in the system, as a lack of trust played a significant part in the recent European banking turmoil. Trust and confidence are the most critical capital for banks, and their loss can lead to bank failures and a loss of faith.
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