It looks like failing banks will be a topic on the financial scene for some time to come. Although the problems seemed to have been put to rest a few weeks ago, they are back in full force. A major American bank, First Republic Bank, collapsed a few days ago, and other regional banks are in deep trouble and may well follow suit.
There are concerns
Europe could be out of obligation, but here too we had an example of how quickly a big bank can get into trouble. If the renowned Swiss Credit Suisse had not been taken over by rival USB, it would have already gone bankrupt. Many are only now discovering that banks are not impregnable fortresses that print money when needed. In fact, they are quite fragile containers, and the current economic situation and social mood do not favor them.
The truth is that the state of high interest rates has made a nice mess in their balance sheets and they are doing just as well as before. Moreover, a small grain of doubt is enough, which can turn into an avalanche on social networks, which in the form of a run on the bank, basically sweeps away any large financial institution. No bank has enough money available to satisfy more than approximately twenty percent of deposit withdrawals.
Although experts point out that the Czech banking system is extremely robust, it can be seen that even in the country, people have certain doubts. According to gold sellers, interest has increased significantly again in recent weeks. Its price also jumped, which had been at stable levels for a long time, but is now close to records again.
What should you do?
Gold has been a store of value for a long time, and people turn to it at times when they lose confidence in government money, i.e. the places where it can be kept. By buying gold, you will be deprived of the interest income that the finances could bring you in a savings account in the bank or in investments, but you have a relatively high degree of certainty that if something goes wrong, you will keep a significant part of the value.
One more thing is very important in these uncertain times. If you happen to have a large amount of money at your disposal, it is a good idea to distribute it in several different banks. In each of them, you pay an insurance limit of 100,000 euros, i.e. approximately 2,350,000 crowns. If you hypothetically had ten million in one bank that went bankrupt, you would only get about a quarter from the guarantee fund. But if you put the money in four different banks, not only is it less likely that they will all go bankrupt at once, but even if they do, you should get everything back from the insurance.
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2023-05-05 15:00:00
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