Careless banking costs lives. Apparently.
From a Cambridge University study:
Northern Rock reminds us that macroeconomic stability is not just about financial health. Whatever one might think of the Bank of England’s U-turn, it probably has spared the United Kingdom from a full-scale bank crisis that would have been borne out not only in economic terms but quite possibly in human lives.
And this from the team that simultaneously accuses the media of propelling Rock-related panic, and thus turning Northern Rock from a “momentary blip on the financial scene into an economic policy debacle.”
According to David Stuckler, Christopher Meissner and Lawrence King, we were putting people’s lives in danger. The “acute mental distress” involved in a bank run can trigger a bout of heart attacks, particularly on “vulnerable older populations”.
Say the researchers:
In the context of a bank system crisis, elderly persons are much more likely to feel threatened by risks to their accumulated savings, and, not surprisingly, the majority of persons who stood in the queue outside Northern Rock appeared to be disproportionately older.
We assumed it was because they don’t know how to use the internet. And they didn’t have to go to work that Friday, being retired. And it was September - still relatively warm - so a day spent indulging in collective worrying in a queue and getting interviewed by the nice man from the BBC might have appealed.
They didn’t seem to be experiencing mental trauma and anguish from the interviews we saw. Certainly not on a par with earthquakes, wars or terrorist attacks which the study broadly implies may have been the case. Those we can see might cause a wave of cardiac failure.
The conclusion here: avoid banking crises. Which we knew. The study’s vague attempt to put the Bank of England on the hook for future threats to cardiovascular health in their promotion of ‘moral hazard’ is silly. And their number crunching is just in bad taste:
If a severe banking crisis were to hit, our results suggest that it would cause anywhere from 1280 to 5130 additional heart disease deaths [3]. To put this effect in perspective, this is more than ten-times the number of British troops who have died in Iraq.
