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| Version 1 | Version 2 |
|---|---|
| Hong Kong bank recovers from run | Hong Kong bank recovers from run |
| (about 10 hours later) | |
| The Bank of East Asia (BEA) in Hong Kong has recovered from a run on its deposits, after a cash injection from the government. | The Bank of East Asia (BEA) in Hong Kong has recovered from a run on its deposits, after a cash injection from the government. |
| Hong Kong's central bank has added an estimated HK$3.9bn ($500m, £269m) to the territory's banking system. | Hong Kong's central bank has added an estimated HK$3.9bn ($500m, £269m) to the territory's banking system. |
| The government has also repeated the bank's assurances that it is sound and that depositors have nothing to fear. | The government has also repeated the bank's assurances that it is sound and that depositors have nothing to fear. |
| On Wednesday, rumours that the bank was vulnerable spurred thousands of people to withdraw their money. | On Wednesday, rumours that the bank was vulnerable spurred thousands of people to withdraw their money. |
| On Thursday, the queues at bank branches were much smaller and before midday local time, the stock market had recovered most of what it had lost the day before. | On Thursday, the queues at bank branches were much smaller and before midday local time, the stock market had recovered most of what it had lost the day before. |
| Panic over? | Panic over? |
| Newspaper front pages on Thursday were dominated by the government's promise to support BEA and Hong Kong's banking system. | Newspaper front pages on Thursday were dominated by the government's promise to support BEA and Hong Kong's banking system. |
| Analysts said that while investors in Hong Kong, as elsewhere, were nervous about the stability of the global financial system, there was little cause to fear a BEA collapse. | Analysts said that while investors in Hong Kong, as elsewhere, were nervous about the stability of the global financial system, there was little cause to fear a BEA collapse. |
| The government has traditionally stepped in to support local institutions to avoid unrest. | The government has traditionally stepped in to support local institutions to avoid unrest. |
| There were no signs of concern at other banks in the territory with business apparently at normal levels. | There were no signs of concern at other banks in the territory with business apparently at normal levels. |
| Traders and brokers, analysts and financial journalists, talk a lot - often with each other, even when they are not supposed to. The origins of financial rumour | Traders and brokers, analysts and financial journalists, talk a lot - often with each other, even when they are not supposed to. The origins of financial rumour |
| BAE chairman David Li insisted his bank was sound. | BAE chairman David Li insisted his bank was sound. |
| In televised comments made late on Wednesday, he said: "Somebody is attacking BEA. I will buy Bank of East Asia shares tomorrow. People are doing this because they want to pummel the stock." | In televised comments made late on Wednesday, he said: "Somebody is attacking BEA. I will buy Bank of East Asia shares tomorrow. People are doing this because they want to pummel the stock." |
| A half-page advertisement was published by the bank in local papers, stressing the support for BEA from the Monetary Authority, and its statements that rumours of bank instability were "unfounded". | A half-page advertisement was published by the bank in local papers, stressing the support for BEA from the Monetary Authority, and its statements that rumours of bank instability were "unfounded". |
| "The business of the bank remains normal and all BEA branches continue to operate as usual," the advertisement said. | "The business of the bank remains normal and all BEA branches continue to operate as usual," the advertisement said. |
| Chinese-language newspapers also gave prominence to reports that Asia's richest man, Hong Kong's Li Ka-shing, was buying heavily into BEA stock. | Chinese-language newspapers also gave prominence to reports that Asia's richest man, Hong Kong's Li Ka-shing, was buying heavily into BEA stock. |
| Mr Li, no relation to the Li family that controls BEA, is an octogenarian billionaire whose wisdom in investments is taken seriously. | Mr Li, no relation to the Li family that controls BEA, is an octogenarian billionaire whose wisdom in investments is taken seriously. |
| 'No concerns' | 'No concerns' |
| The bank's troubles began on Tuesday when a spate of mobile telephone text messages were sent alleging BEA would have to stop trading "in a day" because of its alleged exposure to the troubled US financial institutions Lehman Brothers and AIG. | The bank's troubles began on Tuesday when a spate of mobile telephone text messages were sent alleging BEA would have to stop trading "in a day" because of its alleged exposure to the troubled US financial institutions Lehman Brothers and AIG. |
| BEA immediately responded by revealing its exposure, at about $60m, saying this was insignificant. BEA is the territory's fifth largest lender, and has been in business since January 1919. | BEA immediately responded by revealing its exposure, at about $60m, saying this was insignificant. BEA is the territory's fifth largest lender, and has been in business since January 1919. |
| Moody's Investor service downgraded BEA to "negative" last week after the bank booked losses made by a "rogue derivatives trader". | Moody's Investor service downgraded BEA to "negative" last week after the bank booked losses made by a "rogue derivatives trader". |
| Moody's stressed this week it had no concerns about BEA's liquidity. | Moody's stressed this week it had no concerns about BEA's liquidity. |