The Bank of England is keeping an eye on X – the app formally known as Twitter – as it seeks to guard against further banking collapses, governor Andrew Bailey has revealed.
It comes in response to crises such as the demise of Silicon Valley Bank earlier this year, which have been exacerbated by the speed at which information can spread on social media and cash can be pulled out online.
‘There’s an interesting question about how we monitor Twitter – X – because we have to find ways to know whether this sort of thing is breaking out because obviously we have to react very quickly now if we see evidence that it is,’ Bailey said.
SVB’s UK division was rescued by HSBC in a deal overseen by the Bank of England and the Treasury after it lost 30 per cent of its deposits in one morning.
Bailey told a meeting of the Institute of International Finance in Marrakech, Morocco, that the Bank had to recognise that the rapid spread of information was ‘the world we live in’.
Watching brief: Crises have been exacerbated by the speed at which information can spread on social media and cash can be pulled out online
‘There’s no point railing against it and saying can’t we go back to a world where people couldn’t communicate as quickly,’ he said.
‘They do, it happens and we have to monitor it.’
Bailey said the Bank’s tools for dealing with a banking collapse ‘do work’.
But he added: ‘We now have to respond to the fact that banks can in extremis lose proportions of their deposits quickly.’
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