The Pakistani Spectator

The rumors factories are running high in the country. Financial crisis is reigning high throughout the world and even the Americans are feeling that they are badly hit and they are now talking about the Great Depression II. When the financial markets in the United States cough, the markets of Asia catch fever and the Pakistani market just ask for the ventilators. That is what happened in the recent crisis and the index was frozen in the Karachi Stock Exchange and now there are chances that the stock exchange would remain close from coming Monday for some days to bail out the stock holders.

While that is fact about the stock exchange, the another fact is that in Pakistan the stock markets don’t much affect the overall economic situation, because people don’t really much invest in them. The real money lies with the banks, and State Bank of Pakistan regulates them extremely harshly and there is no chance of their bankrupcy. As the financial system of Pakistan largely depends upon the banks, and the money of Pakistanis resides in these banks among with other valubales, the rumor was purposefully floated that lockers and the foreign current accounts are being frozen and the banks are getting bankrupt.

These rumors were aimed at creating panic among the masses and to have a stampede outside the banks. The rumor-mongers want people to flock around the banks and get their money and valuables out. No bank can return the money of thousand of account holders at the same time. If that happens and people storm the banks to get their assets out, then it would create a mass panic and will bring the banking system to its knees.

Two banks are the special targets of the rumor-mongers; Standard Chartered and the Bank Alfalah. The rumors about their bankruptcy spread in no time without any solid grounds, though both banks are very sound in their assets and backed up by international heavyweights. Bank Alfalah’s total capital stands at more than Rs8 billion against the State Bank’s requirement of Rs4 billion.

The electronic media must ignore these news. They must not even carry out useless and aimless talk shows about such rumors. I for one came to know about these rumors through the Bolta Pakistan program of Aaj TV. Many of my friends and relatives still don’t know about this, and few of them just heard about it through GEO and ARYONEWORLD. These channels must not fan the rumors.

Last 5 posts by Dr. Hassan Isfahani

• Send the Workers Abroad - November 22nd, 2008
• What We are Giving to IMF in lieu of $7billion - November 18th, 2008
• I Trust IMF more than I Trust Them - November 16th, 2008
• Hazrat Fazlur Rehman Diesel and Land - November 15th, 2008
• Pakistan's Routine Economic Meltdown - November 13th, 2008