On January 24, local time, a media report said that the European Central Bank has asked some banks to pay close attention to the activity on social media to detect the early signs of deteriorating market sentiment and avoid leading to deposit runs.。

European regulators stepped up their scrutiny of bank liquidity after the collapse of Silicon Valley Bank and Credit Suisse last March, people familiar with the matter said。

Banks could be in liquidity trouble if customers ask to withdraw deposits at the same time。In October 2022, a reporter posted on social media that a large international investment bank was on the verge of collapse, with speculation referring to Credit Suisse, which also led to a run on Credit Suisse.。By the end of the fourth quarter of the year, a large number of Credit Suisse customers had withdrawn more than 100 billion Swiss francs ($116 billion) in a short period of time.。

This incident has also brought renewed global attention to the phenomenon of bank runs.。Markets are also beginning to question whether financial institutions can withstand sudden liquidity shocks under current regulation and whether new rules are needed.。

In March, the European Banking Authority, an independent European body focused on banking and finance, called on regulators to assess risks, including social media, which it said could "lead to a deterioration in the institution's public image and reputation."。

Sources said that in response to the ECB's request for certain banks in the region, a major European bank has arranged for a team to signal a large number of negative posts to the bank's finance department, which in turn will assess the impact of these negative messages on deposits.。

According to people familiar with the matter, while early detection may not stop a bank run, neither regulators nor banks want to be caught off guard when things happen。

In its financial stability review last November, the ECB noted that "social media allows information to spread faster, but it can also trigger or amplify shocks."。The ECB has also stepped up its review of liquidity reporting in recent months, and the frequency of current reporting has changed from monthly to weekly.。

A bank executive also said that currently, European regulators are also discussing whether they should revise the assumptions used to calculate the so-called Liquidity Coverage Ratio (LCR), a key indicator used by banks to measure liquidity risk。The LCR, introduced after the 2008 financial crisis, requires banks to hold enough assets that can be readily converted into cash to help them survive periods of severe liquidity stress。

The executive added that regulators were investigating banks' personal deposit bases and whether cash could be withdrawn at a faster pace.。Some banking executives believe that an indicator of how much liquidity a bank can release in a day may be more effective than the LCR, which assesses cash access over a 30-day period.。

In addition to European regulators, a number of banking-related regulators around the world have revealed concerns about the phenomenon of bank runs or the impact of social media on bank runs。

The top US banking regulator said last week that large banks should be required to prove they have the ability to access funding quickly in the "ultra-short term."。

The Basel Committee on Banking Supervision (Basel Committee on Banking Supervision), which sets standards for bank prudential supervision, said it would analyze whether some of its liquidity rules need to be revised。Because during the banking crisis in March last year, deposit outflows accelerated significantly under the influence of social media.。

Separately, earlier this week, the Financial Stability Board, the international body that oversees the global financial system, said it was studying changes in deposit dynamics and the role of social media.。