G-khan
04-23-2003, 08:54 PM
By TIMOTHY WILLIAMS
Associated Press Writer
April 23, 2003, 6:00 PM EDT
NEW YORK -- For the second consecutive day, hundreds of depositors rushed to withdraw money from a Chinatown bank Wednesday, sparked by fears that it was on the verge of insolvency.
Customers lined up for blocks outside a branch of Abacus Federal Savings Bank, which is based in New York, after it tried to quell rumors by posting notices that its former manager was being investigated for involvement in "account irregularity."
A similar panic occurred Wednesday at the bank's branch in Philadelphia.
For much of the day outside the New York branch on Canal Street, bank president Thomas Sung, community leaders and several federal banking officials tried to calm fears of hundreds of customers worried that the bank would collapse and they would lose their savings.
By 8 a.m., several hundred people had gathered. Sung, accompanied by police officers, used a bullhorn to explain that the bank was solvent and that the institution was federally insured, meaning that every depositor would be insured up to $100,000 if the bank failed.
While many people departed after they were consoled, most stayed in line until the bank opened at 10 a.m. Sung wandered through the crowd, trying to reassure them.
"They needed to touch me, to see that I was real and not a ghost," Sung said. "The bank is safe and sound."
Language was a problem because while many of the depositors understood only Fujianese, a dialect spoken in the south of China, many of the bank's officials spoke Cantonese or Mandarin. Many in line wore masks due to fears about severe acute respiratory syndrome, or SARS.
"People are worried because things are so confused," said one depositor, Lee Kang, who planned to empty his savings account despite the reassurances of bank officials.
But whereas hundreds of customers were turned away Tuesday, most depositors were able to get inside the branch Wednesday.
After the bank closed for the day, a tired Sung said, "I'm hopeful that tomorrow it will be over."
During the past two hectic days, customers withdrew more than $2 million. The bank had to divert cash from some of its six other branches, which also faced rushes by customers, to cover withdrawals.
The Northeast regional director of the Office of Thrift Supervision for the Department of the Treasury, Robert Albanese, said the bank was in no danger of failing. The continued run on the bank's branches, he said, was "completely unnecessary."
The run started Tuesday after a Chinese language newspaper and radio station reported that the former manager of the Canal Street branch had been fired for allegedly embezzling as much as $1 million.
The bank posted notices, which explained that a manager had been accused of omitting withdrawals made by account holders, wrongfully crediting and charging accounts and creating fake certificates of deposit and savings accounts.
The questionable transactions involved about 40 of the bank's 20,000 accounts.
The former bank manager was fired but has not been arrested.
Copyright © 2003, The Associated Press
Associated Press Writer
April 23, 2003, 6:00 PM EDT
NEW YORK -- For the second consecutive day, hundreds of depositors rushed to withdraw money from a Chinatown bank Wednesday, sparked by fears that it was on the verge of insolvency.
Customers lined up for blocks outside a branch of Abacus Federal Savings Bank, which is based in New York, after it tried to quell rumors by posting notices that its former manager was being investigated for involvement in "account irregularity."
A similar panic occurred Wednesday at the bank's branch in Philadelphia.
For much of the day outside the New York branch on Canal Street, bank president Thomas Sung, community leaders and several federal banking officials tried to calm fears of hundreds of customers worried that the bank would collapse and they would lose their savings.
By 8 a.m., several hundred people had gathered. Sung, accompanied by police officers, used a bullhorn to explain that the bank was solvent and that the institution was federally insured, meaning that every depositor would be insured up to $100,000 if the bank failed.
While many people departed after they were consoled, most stayed in line until the bank opened at 10 a.m. Sung wandered through the crowd, trying to reassure them.
"They needed to touch me, to see that I was real and not a ghost," Sung said. "The bank is safe and sound."
Language was a problem because while many of the depositors understood only Fujianese, a dialect spoken in the south of China, many of the bank's officials spoke Cantonese or Mandarin. Many in line wore masks due to fears about severe acute respiratory syndrome, or SARS.
"People are worried because things are so confused," said one depositor, Lee Kang, who planned to empty his savings account despite the reassurances of bank officials.
But whereas hundreds of customers were turned away Tuesday, most depositors were able to get inside the branch Wednesday.
After the bank closed for the day, a tired Sung said, "I'm hopeful that tomorrow it will be over."
During the past two hectic days, customers withdrew more than $2 million. The bank had to divert cash from some of its six other branches, which also faced rushes by customers, to cover withdrawals.
The Northeast regional director of the Office of Thrift Supervision for the Department of the Treasury, Robert Albanese, said the bank was in no danger of failing. The continued run on the bank's branches, he said, was "completely unnecessary."
The run started Tuesday after a Chinese language newspaper and radio station reported that the former manager of the Canal Street branch had been fired for allegedly embezzling as much as $1 million.
The bank posted notices, which explained that a manager had been accused of omitting withdrawals made by account holders, wrongfully crediting and charging accounts and creating fake certificates of deposit and savings accounts.
The questionable transactions involved about 40 of the bank's 20,000 accounts.
The former bank manager was fired but has not been arrested.
Copyright © 2003, The Associated Press