The Ethics of contributing to a Run on the Banks

[Ernie]

As I read the news the last 4 days, I wondered if it is ethical for Christian to join a run on the banks. First of all it helps the bank to collapse. Secondly, it is taking money ahead of others, knowing that by doing so, others may not get their money.

Seems like a Christian who does so, should be willing to share what money he withdrawls with those who didn't get any.

I understand that everyone as SVP is now supposed to get their money, but what about situations where not everyone gets some as often happens elsewhere and in the US past?

[RZehr]

I would contribute if I feared total loss and thought I could get my money out. For sure. It’s not that different than a thousand other decisions one makes every day.
I wouldn’t wring my hands over it.

Would you buy a house in a rising market? Would you sell in a dropping market? Unless you refuse to do that, I suppose you are contributing to homelessness. Maybe one shouldn’t even live in a house, but rather let others have them, and thereby in some small token way, contribute to… well something virtuous.

Banks will collapse, and runs will happen regardless of what I do or don’t do.

This morning someone told me that his banks stock was ridiculously far down, and that trading had stopped. He wasn’t to worried since he had less that $2,000 in it.
Reality is, if it’s some insignificant amount at risk, people aren’t as likely to run on the bank. And if it’s under $250k, it’s supposed to be insured anyway.

[Ken]

The bigger question is whether it is "Christian" to have more than $250,000 of cash sitting in some bank.

Even most wealthy people don't have that much cash sitting around. The maybe own a home, have some investments in their 401(k) or IRA, maybe have some investments in stocks or bonds (or more likely stock or bond mutual funds), etc. But few people have a quarter of a million dollars sitting around in cash in bank account.

[MaxPC]

I see the situation with the banks as a part of a larger concern over which God has not given me control. He is in charge of that, not I.

God has given me stewardship of those material things immediately under my control and He has entrusted me to use my brain to make use of those gifts as Jesus taught in the parable of the talents in Matthew 25.

As always YMMV.

[Ernie]

Banks will collapse, and runs will happen regardless of what I do or don’t do.

This metality that many people have about ecology, helping the poor, preaching the gospel to those who have not heard, etc. "Whatever I do is not going to really matter in the big scheme of things so I might as well..."
Rather than looking at the part they play or could play in it.

[Ernie]

The bigger question is whether it is "Christian" to have more than $250,000 of cash sitting in some bank.

Even most wealthy people don't have that much cash sitting around. The maybe own a home, have some investments in their 401(k) or IRA, maybe have some investments in stocks or bonds (or more likely stock or bond mutual funds), etc. But few people have a quarter of a million dollars sitting around in cash in bank account.

I don't have 250k sitting around but I do hope to buy a home for more than that at some point. So where should my money be put until I buy a home?

[Ken]

The bigger question is whether it is "Christian" to have more than $250,000 of cash sitting in some bank.

Even most wealthy people don't have that much cash sitting around. The maybe own a home, have some investments in their 401(k) or IRA, maybe have some investments in stocks or bonds (or more likely stock or bond mutual funds), etc. But few people have a quarter of a million dollars sitting around in cash in bank account.

I don't have 250k sitting around but I do hope to buy a home for more than that at some point. So where should my money be put until I buy a home?

You planning to buy a house for cash? A 20% down payment on a $500,000 home is just $100,000.

In any event, if you have that much cash and are saving to pay for a home in cash, put it in a CD then, or a couple of them. 12 month CDs are currently paying about 4.75%. And you can't cash out in a bank run anyway. So your $250,000 locked into a 12 month CD will earn $11,875.

The point of my comment is that only people with single accounts that are massively larger than $250,000 need even concern themselves with bank runs anyway. For the rest of us mortals it is not much of a concern. Our money is safe anyway.

[RZehr]

Banks will collapse, and runs will happen regardless of what I do or don’t do.

This metality that many people have about ecology, helping the poor, preaching the gospel to those who have not heard, etc. "Whatever I do is not going to really matter in the big scheme of things so I might as well..."
Rather than looking at the part they play or could play in it.

I don’t think so. If it’s all about helping people, you are better equipped to help people with the cash you pull out, then you are just losing the cash.
Taking your own cash out of a failing bank, is not at all immoral, and leaving your cash in and losing it in a bank failure is not virtuous. I think this scenario is reaching too far into the ether, and trying to create a moral connection where there just isn’t one. Depositors have zero moral obligation to prop up failing banks. Banks have an obligation to keep the money safe, and give depositors back their money.

This is even different than buying toilet paper in a shortage. The money is already yours, the toilet paper is not.

Maybe being in business is unethical, because it is taking work from someone else; maybe having a job is unethical on similar grounds. Why do we work? For money. If it is ethical to work for money, it is also ethical to be paid the money. And it’s ethical to take money that is owed to you, whether from a job, or from where you’ve stored it in a bank.

If a customer is going bankrupt, but you are one of the last ones to be paid in full before he files, there is nothing wrong with being paid what was owed to you. You have no ethical obligation to refuse payment, and try to help the other creditors. You can if you want to. But there’s not an obligation to do so.

[ohio jones]

You planning to buy a house for cash?

Living within one's means is a good thing. More people should try it.

[temporal1]

Living within one's means is a good thing. More people should try it.

There are many more who could (easily) do this, if only they would.
Madison Avenue is an effective siren.