Kalistani Major History

[Doc]

Limited Bank openings produce runs on local branchesKalistani President orders them shuttered again
Eshar, Odufaray
June 1, 4440


Two days after it reopened, the Eshar Branch was closed again

The plan to open the banks to limited withdrawals was apparently popular.  In fact, it was too popular.  Within days of being reopened, most banks across Kalistan were shuttered once more as hard currency hungry Kalistanis rushed banks to withdraw as much currency as they possibly could.  Riots broke out in most major cities around the banks, and one branch in Luxon Ananto was actually burned to the ground, and two people were killed.  The violence led the President of the Republic to immediately close the banks again for one week.

"This is ridiculous," said Ashley Jade of Kaliburg.  "The Government needs to keep these banks open and let us have our damn money.  I need that money, probably more than most of the people here.  I have bills to pay and I haven't had a job in seven months."

The President addressed the runs on the Bank over the weekend.  "Here's how this is going to go:  Under no circumstances will this Government allow the people to pull all that money out of the bank and horde it in their pillows.  If your goal is to pull your money entirely out of the bank, it is going to take you a little while.  Meanwhile, to prevent runs on the Bank, I have activated the Militia and they will be standing guard at the banks when they re-open on Wednesday of Next week, and only 5 customers at a time will be allowed in.  We will make sure that everyone is served, but we are not going to have scenes like we saw last week."

The President was quick to add:  "You money is safe inside the bank, as long as the criminally minded do not burn them down.  You shall receive access to your entire deposit, denominated in the new Rubles.  Your money isn't going anywhere.  But for the love of Pete, only take out what you need to last for the week, so that we can ensure that others can do the same too.  Relief is only a few months away.  Have faith and hold tight."

The President's words did little to dissuade investors, who continues shorting Kalistani stocks in major International Markets.  "This is not doing us any good:  These foreign Markets are allowing short sales, and these speculators are driving our economy into the ground," said Economist Alice Bennots, who works for the Kaliburg thinktank The Donaldson Foundation.  "More and more, we are hearing calls for the President to open up a Kalistani exchange that can be regulated.  This would at least give the Government a little control over the free fall that our economy has been in for more than a year."

The one positive note for the Kalistani economy this month:  Job losses seem to have hit bottom and appear to have turned a corner.  In the first 12 months of the depression, the monthly average job loss in the public and private sectors was more than 2.7 million per month.  But in April and May, job losses totaled 420,000, showing that FDI and the Government's monetary policies were beginning to pay off in terms of job creation and investment.  More jobs mean there is more money in the hands of Kalistanis and less pressure on the Banks.  When the Banks reopen in a week, runs are expected to be fewer and farther between, and if the hiring trend continues, we could see positive job growth in a few months.