Fifteen years ago last September the news was dominated by pictures of folk queuing around the block at Northern Rock branches to drag their money out before it went bust.
It won’t be anything like that this time. For a start, there are hardly any functioning bank branches left. About 10,000 of them close a year.
So one effect of the switch to digital, app-based banking, is it is now much harder to pay money into a bank, with a cheque, say. But it is much easier to get money out.
The swift execution of Silicon Valley Bank puts that in sharp focus.
As the FT pointed out, $42 billion was wired out of SVB in just a few hours last Thursday, as nervous folk clicked and moved.
One internet post that gets taken seriously can spark a stampede. It doesn’t matter if most people thought the bank was fundamentally sound. Enough people thought others would panic, so they panicked first.
If SVB clients had to go to a branch — a well-resourced, nice place with free coffee, in order to get money back — SVB would still be with us.
When Northern Rock went under, a run on a bank took days or weeks to unravel.
Now it takes an hour. Which explains why the takeover of Credit Suisse by UBS had to be agreed so quickly, and while markets were shut.
The banks closed branches in the name of efficiency. One wonders which of them is now regretting that.
For all that, banks in the UK are solid. They are in much, much better shape than they were back then. Regulators and governments have got smarter at dealing with potential bank collapses, if only out of practice, which means we can all keep agreeing that £20 is worth exactly £20 (adjusted for inflation, of course).
This isn’t like 2008. So long as everyone takes a deep breath.
