Financial crisis & Bank run: how to save your savings?

"A financial crisis will erupt before 2025, according to major investors... or even within three years" announced Capital in December 2019. The COVID-19 pandemic triggered a financial market crash with "Black Thursday" on March 12, 2020. But one year on, new records are being set, the same indices have returned to or even exceeded their pre-pandemic levels, and some stocks have even exploded, notably in technology. Yet this sudden upturn is worrying observers and investors alike. Should we fear a new financial crisis? Could this lead to bank panic and collapse? If so, how can we insure our savings?

The next financial crisis is upon us

"In my opinion, it would be extremely dangerous to think that the end of the health crisis equals the end of the crisis. In fact, the opposite is true," declared Vincent Mortier, Deputy Head of Asset Management at Amundi, in La Tribune last March.

In 2018, two economists, Dany Lang and Steve Keen, were already predicting a financial crisis, within three years, comparable to the Subprime crisis of 2008. In Blast media, Dany Lang explains that the COVID-19 crisis only postponed this crisis because "economic activity came to a halt and states intervened massively in the economy to deal with this exceptional situation."

In October 2021, 40% of investors fear a financial crisis in the coming months, according to the ING Barometer. According to Dany Lang and Steve Keen, it is the private debts contracted by households and companies that will be at the root of the global financial collapse.

According to the article in La Libre Eco, six countries could soon be affected by a financial crisis: the United States, Japan, Germany, Taiwan, Sweden and the Netherlands.

Others considered at risk include France, Hungary, Romania, New Zealand and Portugal. "Belgium does not seem to be concerned by a forthcoming financial crisis, although a crisis in a European country could affect its economy."

Can we go as far as a bank run?

Bank run" is a wave of banking panic that occurs when all customers close their accounts at the same time. This risk is associated with customers' loss of confidence in a bank, or more broadly, in the conventional banking system. It most often occurs in the wake of an economic crisis, or the possible failure (founded or unfounded) of a bank. When a "bank run" occurs, it leads to the failure of individual banks, or even the entire banking system.

Historically, numerous "bank runs" have occurred since 1873, linked to real estate speculation and speculation on the financial markets, particularly in the United States. But Europe has not been spared: we all remember the financial crises in Cyprus in 2012-2013; then in Greece in 2015, when Greeks withdrew more than three billion euros from their bank counters in one week.

In our current economic system, some believe that a bank run is out of the question, thanks to the support of central banks and the authorities, who are doing everything necessary to ensure that individuals retain their confidence in banks and their capital in banking institutions.

However, with the worrying memory of the 2007-2008 subprime crisis and the risk of speculation, confidence in the global banking system has been shaken. We all remember the collapse of a financial behemoth: Lehman Brothers. With a hole of over 600 billion dollars, the bank went bankrupt, dragging the financial markets and the global economy with it into an immense unknown.

Investing in gold, the alternative to counter the impact (and cost) of financial crises

If everyone is trying to withdraw their money from their bank at the same time, the state may decide to cap or freeze withdrawals, limit transfers and, in extreme cases, puncture people's savings. It should be noted that, since 2008, all deposits held with Belgian investment firms are protected by the State up to a maximum of €100,000 per person and per institution.

For decades, gold has been used as a safe-haven investment, especially in times of uncertainty such as crises, whatever their origin. The advantages of the yellow metal are manifold, thanks in particular to investment in physical gold such as coins or gold bars. In particular, it provides a hedge against inflation and protects capital.

Even if the banking system collapses, precious metals can still be used as a means of payment. Because gold is universal, its value is the same all over the world, and it's easily convertible into other currencies. Find out more at CaraOr, your specialized gold counter. We'll advise you on your investment project to diversify and secure your savings according to your profile. Our experts are at your service in Wallonia, where we welcome you with or without an appointment at our secure premises in Rixensart, a few kilometers from Brussels, and in Liège.