Eric Cantona, infamous for his kung fu kicking ability, has now aimed a punch squarley at the Banks. (You may remember him playing football for a little known team in Manchester).
In this video “King Eric” suggests the way to start a revolution is not on the streets, but instead through everyone withdrawing their money from the banks. It’s actually quite a scary thought.
We have already seen what happened at the beginning of the credit crunch in the UK when there was a run on Northern Rock. The government had to step in to bail them out.
What would happen if there was a run on all major banks? The condensed view:
Day 1 Liquidity would dry up at the banks immediately
Day 2 Banks would start selling assets to improve liquidity which would prove difficult as no buyers
Day 3 Not everyone would get their cash out of the banks as there are not enough physical notes in circulation
Day 4 Rioting on the streets
There is another way, use Clear Books to stay on top of your finances and manage your cashflow to reduce borrowing. It’s no good knowing your financials only when you are in the office, you need to have them at your fingertips all of the time. With online accounting software you have the flexible access to log in from home, the office, on holiday or on the train. Anywhere really, you just need an Internet connection and a web browser. You have real time, up to date numbers to keep on top of your business.
Borrowing is the root of the problem and if this can be better managed then we would not reach the levels of leverage that causes financial meltdown.