Exclusive outtakes from industry leaders
Crisis-hit rich wanted cash they could count on
The credit crisis prompted a well-documented exodus of client money from risky assets into safer ones like government bonds, cash and gold.
But some rich clients of private banks would have preferred to take their money and run.
They were so rattled by the threat of financial instability to their wealth that they wanted the reassurance of having as much of it as possible in a form they could hold in their hands and count: banknotes.
Wavering confidence in the financial system led some to consider taking out their entire cash balance and holding it in banks’ vaults in physical notes, said James Fleming head of international business at British private banking blue-blood Coutts.
“That was a request on three or four occasions at the height of the crisis when everybody was concerned about the balance sheets of the banks generally, not us specifically,” Fleming said.
“We cautioned against holding cash in the vault,” he said, adding: “They didn’t do it.”