Topic: Bulgaria bank run bullish for Crypto! (Read 1227 times)

How do you prove a rumor false? Can you prove that those "rumors" were not true?

Getting money out alone is not enough. You will also need to buy items which hold value when the country is in deep trouble.

Transferring money to an exchange and buy bitcoin during a bank run? Don't bother with it, get your money out first! If a local bank goes out of business, you try to get fiat out. If all local banks starts to shake, you change currency or hold gold. Bulgarians trust euro, they will prefer euro over a crypto.

Bulgaria's central bank said Friday the local banking system is being attacked through "rumors and malicious public statements" in an attempt to destabilize the country, as the second lender in a week suffered a bank run.

Some customers of First Investment Bank received text messages or emails urging them to withdraw their deposits, leading to lines as long as 100 people at the bank's branches, people who saw the lines said.

Interior Minister Tsvetlin Iovchev said electronic communication was an apparent tool in a misinformation campaign, adding that anyone involved in efforts to destabilize the banking sector or bring down banks would face "severe criminal penalties."

Late last week, Bulgaria's central bank halted operations of Corporate Commercial Bank AD, also known as Corpbank, after a run drained the bank of cash to meet client demands. The central bank said the run was sparked by negative reports in local media, centering on alleged tensions between local business moguls holding equity stakes in Corpbank.

It put Corpbank, the country's fourth-largest lender by assets, under its administration. Corpbank is majority-owned by Bulgarian privately held investment company Bromak EOOD.

The government has pledged resources to recapitalize local banks if necessary.

"There is some anxiety. Generally the banking sector is safe; there is no structural underlying worry. It's mostly an effect of the prolonged political instability," said Daniel Smilov, an analyst at the Center for Liberal Strategies in Sofia.

Bulgaria, the European Union's poorest country per capita, has suffered nearly a year and a half of political turmoil due to the government lacking a strong mandate, and widespread public discontent with perceived corruption in public administration.

Earlier this month the left-leaning Socialist Party-led government said it would step down more than two years ahead of schedule to allow early elections. On Friday leaders of the country's major political parties set Oct. 5 as the firm date for parliamentary elections.

Embattled Prime Minister Plamen Oresharski said he sees "no cause for concern on the part of citizens" with respect to the banking sector, adding that the pressure on certain banks looks to be the precursor to likely tense election campaigning.

Analysts Timothy Ash and Demetrios Efstathiou at Standard Bank SBK.JO -0.70% described the situation in a written note as serious and said the classic bank run is fueled by speculation and rumors. "[But] we still do not see this as a systemic problem," they said.

"The banking sector is very significantly foreign owned, and we would expect foreign banks to step up and inject extra capital into their subsidiaries if need be," they said.

A spokesperson at OTP Bank's head office in Budapest said the level of withdrawals at the company's Bulgarian unit has been stable, and capital at the unit has been boosted. "It's important to emphasize that [Bulgarian unit] DSK Bank has no exposure to Corporate Commercial Bank nor to First Investment Bank," OTP said.

The local units of Raiffeisen Bank RBI.VI 0.00% and UniCredit UCG.MI -0.16% Bank didn't immediately respond to requests for comment.

the run may end, but the fear has been struck into people's hearts.

the way this run works is that people can not get cash out, but online banking still works  (because book money can be created from thin air).

therefore buying BTC is possible "during runtime" and it is an electronic form of cash ... in a bank default would you prefer to have the money in your bank account or BTC? which one is safer if the bank truly goes out of business?

even if the insurance system works it will take months to get settled 

Bank run was started by false rumours, so it is going to end soon. Even if people empty their accounts, not many will prefer cryptos over euros. It's bullish for cryptos, however not very significant.

anyway you could copy and paste the article? not all of us have a subscription to WSJ and the article gets covered by random ads if you don't.

OK so the only thing the people can turn to is crypto

http://online.wsj.com/articles/second-bulgarian-bank-hit-by-run-on-deposits-1403883024

Self explaining, hehehe.