German central bank chief warns of social media risks
Jul 20, 2023
Frankfurt [Germany], July 20: The head of the German central bank warned on Wednesday that fakes news on social media can trigger bank runs, which can plunge banks into crises, local German media reported on Wednesday.
Talking to German media, the Bundesbank President Joachim Nagel cited the case of Silicon Valley Bank that collapsed due to a bank run.
Nagel suggested that banking supervision could be extended to social media, so that supervisors could identify the risk of a bank run at an early stage.
Social media platforms have emerged as an increasingly important tool for investors hunting for information. Industry insiders have warned that information on social media can spread so fast that a bank run can happen overnight.
This means supervisors have to act faster, Nagel said. A banking supervisory task force to monitor social media and rapidly detect emerging risks could be set up in Europe, as in South Korea, he suggested.
Source: Xinhua
