Edition #10 - How consumers can deal with bank failures, Indonesia-South Korea Trade Agreement, US Treasury and MAS strengthen cybersecurity and more!
In today’s edition
How consumers can deal with bank failures
JPMorgan Chase is buying most assets of First Republic Bank after the nation’s second-largest bank failure ever, in a deal announced early Monday that protects the deposits of First Republic’s customers.
According to a New York Times article, the failure of the 3 banks including SVB(Silicon Valley Bank), Signature Banks, and the First Republic Bank is bigger than the 25 banks that failed in the 2008 global financial crisis. The assets of the 3 banks together were $532 billion. This is higher than the assets of the 25 banks in 2008 worth $526 billion even after adjusting for inflation.?
As a common citizen, this might scare you a little. For the longest time, we’ve been told that banks are the safest place to keep our money. And while this is still true, bank failures are also possible as we have witnessed over the past few months. So what can you do to avoid losing the money that you’ve stored in a bank?
I. Make sure that the banks you choose are insured. Usually, this is done by an organization that is backed by the central bank or government of your country. For example,
II. Don’t keep all your savings in one bank. Similar to the rule of investing where you don’t put all your eggs in one basket, divide your savings between 2-3 banks. Why should you do this?
Because in case one bank fails, the amount insured might be less than all your savings in that account. So while you get some money back, you might lose a significant chunk of it. This is why it is smart to divide your savings and keep it in different banks.?
III. One might also wonder whether you can predict when a bank is going to fail as a preventive measure. While it might be possible to do so with financial indicators, not everyone has the knowledge and easy access to this data in order to determine financial health.?
Indonesia-South Korea Trade Transactions Will Use Rupiah and Won
After China and Brazil, more countries are shifting from using the reserve currency(the US dollar) as an intermediary for trade. As per the latest news reports, trade transactions between Indonesia and South Korea will start to use the Rupiah and Won as substitutes for the US dollar.
This agreement was made at a meeting between Bank Indonesia (BI) and the Bank of Korea, on the sidelines of a panel of finance ministers and ASEAN Plus Three central bank governors in South Korea.
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“The wider use of each country’s local currency for bilateral transactions will ultimately contribute to promoting trade between Indonesia and South Korea, as well as deepening financial markets in local currencies in both countries,” said Bank Indonesia.?
US Treasury and Monetary Authority of Singapore Conduct Joint Exercise to Strengthen Cross-Border Cyber Incident Coordination and Crisis Management
The United States Department of the Treasury (Treasury) and the Monetary Authority of Singapore (MAS) carried out a cross-border cybersecurity exercise from 25 to 27 April 2023. This exercise allowed both agencies to test and strengthen existing protocols for information exchange and incident response coordination for cyber incidents involving banks operating in both jurisdictions.
In today’s digital economic environment where individuals and businesses are threatened with the risk of cyber attacks to steal crucial information, manipulate data, and potentially steal money from you, this type of exercise is necessary. It helps to keep the effectiveness of the system and security protocols in check. In case a cyber incident occurs with a cross-border impact, these systems must be set up for a swift response and effective recovery of the affected operations.?
Other news plus good reads
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