Bank of England tracks Twitter to protect against bank collapses
The Bank of England is keeping an eye on X – the app formally known as Twitter – as it seeks to guard against further bank collapses, Governor Andrew Bailey has revealed.
This comes in response to crises such as the shutdown of Silicon Valley Bank earlier this year, which were exacerbated by the speed with which information can spread on social media and money can be withdrawn online.
“There’s an interesting question about how we monitor Twitter — X — because we have to find ways to know if something like this is blowing up, because obviously we have to react very quickly now if we see evidence that it is,” Bailey said.
The British arm of SVB was rescued by HSBC in a deal overseen by the Bank of England and the Treasury after it lost 30 percent of its deposits in one morning.
Bailey told a meeting of the Institute of International Finance in Marrakesh, Morocco, that the bank must recognize that the rapid spread of information is “the world we live in.”
Watch in brief: Crises exacerbated by the speed with which information can spread on social media and money can be withdrawn online
“There’s no point in arguing that and saying we can’t go back to a world where people can’t communicate as quickly,” he said.
“They’re doing it, it’s happening and we have to watch it.”
Bailey said the bank’s tools to deal with a banking collapse were “working”.
But he added: “We now have to respond to the fact that banks can in extreme cases quickly lose some of their deposits.”