Wave of panic cash withdrawals sweeps Latvia after false rumours of Swedbank bankruptcy hit social networks

 

Latvia was yesterday struggling to
control a mass wave of panic cash withdrawals from the country’s
biggest bank, Swedbank, following a rash of
false
social media network rumours which claimed that the Swedish-owned lending group was going bankrupt.

More than 126 of Swedbank’s 298 Latvian cash machines were reported to have run out of notes yesterday after anxious account holders withdrew in excess of  10 million Lats – the equivalent of £12m million- over the weekend and on Monday.

Long lines formed in front of Swedbank cash machines in the capital Riga after false rumours about the bank’s alleged financial difficulties had circulated on the social media network, Twitter.

Swedbank is a leading financial institution in Latvia and the neighbouring Baltic states of Estonia and Lithuania. Maris Marcinskis, Swedbank’s chief executive in Latvia, dismissed reports about the bank’s alleged liquidity problems  as “absurd”.

The false rumours, which started at the weekend, urged account holders to withdraw their cash and claimed that Swedbank had run out of money in Estonia and that its cash machines in Sweden were no longer working. “These were just outright lies,” Mr Marcinskis said.

Latvian police said they had launched an investigation in an attempt to track down the source of the false rumours.

The panic withdrawals appear to have been exacerbated by Latvia’s most recent banking crisis which occurred last month.

The government of Prime Minister Valdis Dombrovskis, was forced to nationalise Latvijas Krajbanka, the country’s 10th largest bank, after regulators found evidence of fraud. Depositors were unable to withdraw money for days as a result.

Mr Mancinskis blamed the Krajbanka scandal and the current “abundance of alarming headlines about Europe and the eurozone” for the jittery response of many Latvians to rumours and speculation about the financial markets and the banks.

Fears about financial stability have dogged Latvia since its independence in 1991. Three years ago false rumours about an imminent devaluation of the Lat – which is pegged to the euro - prompted widespread panic.

Later in 2008 a deepening economic crisis forced the government to turn to the International Monetary fund and the EU for a $10bn loan obtained in return for a strict austerity drive. Latvia’s economy shrank by 18 per cent in 2009, but has since been performing better.
 

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Graphic and Motion Designer

Negotiable: Recruitment Genius: Do you get a buzz from thinking up new ideas a...

Recruitment Genius: Media Telesales Executive - OTE £25,000

£14500 - £16000 per annum: Recruitment Genius: This is an opportunity to join ...

Recruitment Genius: Female Care Worker

£7 - £8 per hour: Recruitment Genius: This expanding, vibrant charity which su...

Recruitment Genius: Parts Supervisor & Advisor - Automotive

£16500 - £30000 per annum: Recruitment Genius: One of the South East's leading...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones