What happened when the wave of bank withdrawals arose, giving up interest and leaving only the principal?
Recently, the phenomenon of queuing up to withdraw money at some urban bank outlets has aroused widespread concern in society. Some people worry about the bank credit crunch, some people think it's the fear of inflation, and some think it's the impact of digital currencies.
What exactly is causing this unusual phenomenon?Why do people still prefer to keep their money in cash instead of in the bank when interest income is almost zero?
i.The truth behind the surge in bank withdrawals.
First, we need to figure out the truth behind the surge in bank withdrawals. According to ** reports, most of the people queuing for withdrawals are small and medium-sized banks, and most of them are in areas with underdeveloped economies or poor social security.
Due to their small scale, narrow business scope, and weak risk prevention and risk management capabilities, these banks generally face greater operating pressure and credit risks.
In recent years, factors such as tighter financial supervision, intensified market competition, rising non-performing assets, and tight liquidity have further deteriorated the operating conditions of these banks, and even defaulted or fraudulently occurred, causing some customers to lose confidence and withdraw deposits in advance or transfer them to other banks.
There are also some special factors that cause some customers to be more inclined to withdraw cash. For example, in some areas affected by economic recessions or natural disasters, residents' lives and businesses have been affected, and they need more cash to respond to emergencies.
In some areas, due to policy adjustments or social changes, residents are uncertain or worried about the future economic situation and social stability, and tend to increase their cash reserves in case of emergency.
We can see that the surge in bank withdrawals is not a national or widespread phenomenon, but a local or case-by-case phenomenon.
This does not mean that there is a credit crunch or systemic risk across the banking sector, nor does it mean that there is widespread public fear or sympathy for inflation or digital currencies. It simply reflects some of the specific issues and challenges faced by certain regions or certain banks at a particular time.
ii.What are the pros and cons of holding cash instead of depositing it in the bank?
Let's break down the pros and cons of holding cash instead of keeping it in the bank.
In terms of advantages, cash has the following advantages: cash has the highest liquidity and convenient payment. Other goods and services can be paid for or exchanged in cash at any time, in any place and under any circumstances.
As for cash deposited in the bank, although it is also possible to pay or transfer money through bank cards, mobile payments, online banking, etc., these methods depend on the normal operation of the banking system and the smooth operation of the network, and any failure or interruption will cause problems or delays in payment or transfer.
Cash offers the highest level of privacy and security. People who hold cash are free to handle and use their money without having to report or disclose their finances and transactions to any person or organization, and are not subject to surveillance or interference by any person or organization.
However, the funds deposited in the bank are subsequently recorded and managed by the bank and may be subject to disclosure or theft, as well as may be required or restricted by ** or the law.
In addition, cash is also somewhat resistant to inflation and risk. In the case of inflation, people who hold cash can use their cash to buy goods and services that are valuable or may appreciate in value at the right time, thus protecting their assets from currency depreciation. Money deposited in a bank causes a decrease in the real purchasing power of the deposit because the interest income is usually lower than the inflation rate.
In the event of a risk event, people who hold cash can use cash to respond to emergencies in a timely manner and protect their lives. On the other hand, if cash is invested in a bank, deposits cannot be withdrawn, and deposits can also be lost if the banking system crashes or closes.
However, there are also some drawbacks to keeping cash on hand compared to keeping it in the bank. Storing cash is costly, and the risk of losing it is high. People who have cash on hand must spend time and effort protecting it from theft or destruction. On the other hand, depositing cash in a bank allows you to enjoy the custodial services and insurance protection provided by the bank without worrying about the safety of the cash.
The return and appreciation opportunities for cash are low. People who hold cash do not receive interest income or other forms of returns, nor can they internalize their money by investing or managing cash. On the contrary, by keeping money in the bank, people can not only earn interest income or other forms of returns, but also use the various investments or wealth management products provided by the bank to increase the value of their money.
In addition, carrying large amounts of cash for long-distance travel or cross-border transactions can be inconvenient and difficult due to weight, size, security checks, exchange rates, and more. However, money deposited in a bank can be paid or transferred conveniently and quickly through various electronic payment methods, regardless of geographical and national borders.
As you can see, there are pros and cons to keeping cash instead of keeping it in the bank, and there is no absolute good or bad. Different people will make different choices according to their needs and preferences at different times and in different situations.
Third, how to rationally view the tendency to withdraw funds and cash on hand?
We should not panic excessively, nor should we blindly follow the trend of bank withdrawals, but should make rational judgments and make appropriate decisions according to our actual situation.
To assess whether a bank has good operating capabilities and risk prevention and management capabilities, we can refer to the assessments and statements of financial regulatory authorities and authorities, as well as the bank's financial reports and ratings.
In terms of the development potential of the banking industry, we can judge whether the bank has good development potential and profitability according to the policy orientation and market development, as well as the bank's innovation ability and competitiveness.
Income levels and expenditure structures, as well as expected investment returns and risk appetite, also help determine how much cash and savings are needed, and what the term and type of savings should be.
We should not be overly obsessed or indifferent about whether or not to keep cash, but should use it wisely according to our goals and circumstances.
You can take full advantage of the liquidity, confidentiality and inflation resistance of cash to meet daily and emergency needs, and take advantage of opportunities that may appreciate or depreciate in value.
At the same time, it is also necessary to pay attention to the cost, profitability and portability of storage to avoid the risk of asset loss or too much or too little cash.
In terms of cash management, some scientific and effective methods can be adopted, such as formulating a reasonable budget and plan, using safe and appropriate funds and channels, seeking professional and reliable advice and services, etc.
In short, the wave of bank withdrawals is a complex and multifaceted social phenomenon, involving many factors such as banking, monetary policy, market economy, and social psychology. This phenomenon cannot be summarized and evaluated in one sentence, nor can it be blindly followed or opposed.
Holding cash in hand is a problem that everyone has to face, and it has a variety of possible answers. There is no absolute right or wrong answer, only fit and unsuitable. We need to combine our own goals and actual situation, weigh the pros and cons, and adopt a scientific and effective approach to cash management.
In this way, we can turn cash from an invisible barrier that leads to the loss of wealth and hardship to a powerful tool to increase wealth and improve life.