Bank runs: 'People panic to get money'
The Governor of the Bank of England, Sir Mervyn King, once said it was not rational to start a bank run, but rational to participate in one once it has started.
Are European banks about to be tested? Yesterday the UK government sent a plane carrying a million Euros in cash to provide contingency funds for use by British military personnel if Cyprus if cash machines dry up: the banks are closed until Thursday.
Talking to Today business presenter Simon Jack, Peter McNamara, a former head of personal banking at Lloyds TSB as well as former group managing director of Alliance and Leicester, said that "banking is very dependent on confidence... a bit of a panic can rapidly develop as people want to be... first in the queue to get their money while there is still some available."
First broadcast on BBC Radio 4's Today programme on Wednesday 20 March 2013.
20 Mar 2013
- From the section Business