Bruce was stunned when he read the one-sentence reply from his fund.
His daughter was starting college, and he needed to withdraw currency from a real estate fund he’d invested in several years ago. He had plenty of cash in the account, so he went ahead and made the request online. But the response Bruce received stunned him.
In big bold letters, he was told that due to the financial crisis…
"We regret to inform investors that cash withdrawals are not permitted at this time."
This isn’t a fictional account. And it’s not from the 2008 financial crisis.
It happened last week.
Within 11 days after Britain voted to leave the EU, funds banned clients from withdrawing funds due to “extraordinary market conditions.” These are not small, obscure funds in the UK. Each manages billions of British pounds. Because of the crisis, however, it quickly became apparent that continued redemption would crash the fund and force management to sell assets at fire-sale prices. Executives at each fund felt they had no choice. Bruce couldn’t get his own money out!
Back home in Malaysia, the usual denial of withdrawal of cash would probably due to the fact that one do not have sufficient cash to begin with.... but for some of us whom has stowed their life savings and hard earned cash, this is indeed bad news. Fikir-fikirkanlah ya...
"We regret to inform investors that cash withdrawals are not permitted at this time."
This isn’t a fictional account. And it’s not from the 2008 financial crisis.
It happened last week.
Within 11 days after Britain voted to leave the EU, funds banned clients from withdrawing funds due to “extraordinary market conditions.” These are not small, obscure funds in the UK. Each manages billions of British pounds. Because of the crisis, however, it quickly became apparent that continued redemption would crash the fund and force management to sell assets at fire-sale prices. Executives at each fund felt they had no choice. Bruce couldn’t get his own money out!
Back home in Malaysia, the usual denial of withdrawal of cash would probably due to the fact that one do not have sufficient cash to begin with.... but for some of us whom has stowed their life savings and hard earned cash, this is indeed bad news. Fikir-fikirkanlah ya...
