Three Chinese banks have inexplicably frozen $178 million worth of customer deposits that have been documented, with possibly $1.5 billion total being frozen. The banks are refusing to release any further information. When questioned, the banks will only say they are upgrading internal systems:
None of the three banks responded to Reuters’ emails or phone calls seeking comment.
While nominally small, China’s numerous local banks have outsized significance because they lend to small and mid-sized firms so their activity can be an indicator of the health of the economy, the world’s second-biggest after the United States.
There is no telling if this is a technical computer problem, a ransomware issue, or the beginning of Chinese bank failures that could trigger nationwide bank runs, but given the interconnected nature of the modern economy, the the issues with Chinese real estate developers like Evergrande, it is a news story to keep an eye on.