Economy Joachim Nagel
Bundesbank President sees risk of a bank run through social media
Status: 01:21 a.m. | Reading time: 2 minutes
For stronger banking supervision: Joachim Nagel, President of the Bundesbank
Quelle: Getty Images/Sean Gallup
“We must not rest”: Bundesbank President Joachim Nagel warns of the dangers that could arise from fake news on social media. The case of the Silicon Valley Bank in the USA showed how quickly a run on the banks could be unleashed.
Bundesbank President Joachim Nagel has warned of the dangers of a bank run through fake news and has suggested extending banking supervision to social media. The supervisors could then recognize at an early stage whether there is a risk of a so-called bank run, said Nagel to the editorial network Germany.
In a bank run, large numbers of savers pull their money from a bank at the same time. In the worst case, the financial institution could then default.
The case of the Silicon Valley Bank in the USA showed that you have to get faster, said Nagel. There, statements on social media would have helped accelerate a bank run. The question is whether fake news could also trigger something like this. The US bank collapsed in March.
Nagel said he had heard from a colleague in South Korea that a banking supervisory task force was systematically monitoring social media there. They can then see early on if something like this is emerging. “We could also think about that in Europe,” he said: “We must not rest on our laurels, we have to take a close look and sharpen “blind spots” in supervision.”
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Nagel reiterated his assessment that interest rates in Europe will continue to rise to combat inflation. “I’m assuming that we will raise key interest rates,” said the Bundesbank President, referring to the ECB meeting on July 27. “Practically everyone” would expect an increase of 0.25 percentage points.
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Inflation is “a greedy beast,” said Nagel. It would therefore be a mistake to ease up on the fight too early and cut interest rates again prematurely. He also said he saw room for banks and savings banks to raise interest rates on savings. The banks would only pass on higher interest rates to savers after a certain delay. Some just walked ahead in a double step. “But I expect the market will sort that out. The more banks pass on higher interest rates to their customers, the more the others are under pressure.”
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