Rumors Spark Run on Hong Kong Bank | Voice of America - English
Rumors rattled customers of a Hong Kong bank, sparking the city's first bank run in decades.
Thousands of customers lined up at Bank of East Asia branches, across Hong Kong, for two days last week, trying to withdraw their money. BEA executives and Hong Kong officials say the first major bank run in the city in two decades apparently was sparked by rumors sent via cell phone text messages. John Tsang is Hong Kong's financial secretary. Tsang says the rumors are unfounded and malicious. He says the Bank of East Asia is financially sound. To help calm investors, the Hong Kong Monetary Authority added more than $500 million to the city's financial system. After two days of nervousness, the jitters calmed and business returned to normal at BEA, Hong Kong's fifth-largest bank. But in another sign that Asia's banks face tough times because of the global credit crisis, the banking giant HSBC announced in Hong Kong that it will cut 1,100 jobs, worldwide. Most of the cuts will be in its global banking and market division and half the jobs eliminated will be in London. Nasdaq OMX has signed an agreement with the Ho Chi Minh Stock Exchange to help develop Vietnam's financial market. The two companies say they hope to use Nasdaq's technology and worldwide reach to strengthen the Ho Chi Minh exchange and attract more international investors. Nasdaq OMX, based in New York, is the world's largest financial exchange company. In Cambodia, the central bank has ordered commercial banks to triple the amount of capital they hold, to nearly $40 million. The government says it wants to tighten up regulation of the banking industry and ensure that banks are well funded. Banks have until 2010 to meet the new rule. The European Union has filed a complaint with the World Trade Organization, saying that India's state tax system blocks European wine and spirits from much of the country. Last year, the government lowered federal import duties, after the EU had complained to the WTO. But the EU now says some states - chiefly Goa, Maharashtra and Tamil Nadu - have high taxes or impose tough import restrictions that unfairly discriminate against foreign liquor.