“We don’t trust you anymore;” more and more people are questioning their banking institutions

BY SIMONE J. SMITH

It cannot be denied; things are going from bad to worse in the financial markets. Citizens who have put their trust in banking institutions all over the world are starting to look at them sideways. I am going to start by saying this; it’s a good idea to start finding alternatives to protect your wealth before it all starts to fall apart around us. Our leaders won’t come to rescue us, and it is safe to say that bank bureaucrats most certainly won’t.

Conditions in the financial system are making many people lose their trust in banks, especially now that interest rate hikes threaten to unleash a credit crunch similar to what happened during the 2008 financial crisis. What we don’t realize is that the problems in the financial world go way deeper than most of us think, and that’s an extremely alarming situation for consumers, who don’t even know what they’re truly in for.

All over the world, and particularly in the U.S., Canada, the UK, and China, thousands of bank branches have suddenly closed. According to S&P Global Market Intelligence, in 2020, 2,126 bank branches closed in the United States. That was the highest number of bank closures ever recorded until 2021 when roughly 3,000 more branches disappeared from the system without notice.

According to data released in a report conducted by the National Community Reinvestment Coalition, from March 2020 to October 2021, over 4,000 branches were shut down. Nationwide, Wells Fargo closed a net 267 branch locations in 2020, and that number escalated to 993 by the end of 2021. It suggests that banks are simply rushing to close as many branches as they can, as quickly as they can, anywhere they can.

The main problem is that the reduced number of functioning branches and available ATM machines means that many people will not be able to get cash on their hands in case an emergency hits. People will not be able to have access to their savings or regular banking services if an outage occurs

Let’s take a look at what is happening in Canada. Days after Prime Minister Justin Trudeau said he would invoke emergency orders to crack down on demonstrators by freezing their bank accounts, five major Canadian banks went offline. Royal Bank of Canada (RBC), BMO (Bank of Montreal), Scotiabank, TD Bank Canada, and the Canadian Imperial Bank of Commerce (CIBC) were all hit with unexplainable outages.

Canadian Twitter users reported they couldn’t access their funds at the ATMs. One user took a photo of an error message at one of RBC’s ATMs that read, “Tap transactions aren’t available for this card.” There were countless stories of banking customers who experienced trouble accessing their funds yesterday evening. There’s been a lot of speculation about the outages. Some Twitter users have said “banks are faking outages” to minimize bank runs as people lose faith in the banking sector, following Trudeau’s comments earlier in the week. No bank explained the source of the outrage.

It appears that the federal government has stretched its power to direct banks to force any business conducted with Freedom Convoy protesters and affiliates to freeze their bank accounts. How are we supposed to trust our institutions when it seems that they are in collusion with the government?

To top it all off, new rules backed by several global economies, including the U.S. government, do not require major banks to ensure that communities will have access to cash when their last branch shuts. In Europe, this has sparked some fierce consumer backlash over the past couple of weeks. No surprise, this news hasn’t hit the U.S. headlines just yet.

In the UK, some dissatisfied customers started to move their money from their accounts and into their crypto wallets, while others engaged in a bank run to take their money out of the system. As a result, several banks have seized people’s assets and crypto portfolios amid growing fears that bank runs would continue to occur on a ‘faster, greater scale’, according to a recent report published by MarketWatch.

The world’s population is just now realizing that the system is much more fragile than it seems, and that, in fact, their wealth is not protected in their bank accounts. How do you feel about your banking institution? Do you think that the government is right to freeze people’s accounts?