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HSBC Singapore has gotten many people to queue up at their various branches by only offering 2%. Again the promotion was so overwhelming, HSBC has to prematurely end it today.
Whereas back in July, SCB paid more at 2.28%. To read about SCB's offer click http://investingwithedgar.blogspot.com/2008/07/scb-was-it-shrewd-piece-of-business.html
With economic activities at a slow pace, why is HSBC willing to pay beyond the market rate for a big chunk of 12-month money at this time? Could they not borrow from the interbank market? Why? Why?
P/S - UOB Bank offers its preference shares at 5.05%. Are there long queues for the shares too?
1 comment:
that's because banks are hoarding cash and are not lending interbank for terms longer than 1 month... and at a time where banks are going belly up due to subprime losses ... liquidity is king and crucial for survival. Bear Stearns died because its liquidity was shortterm and when everyone pulled their funding from Bear Stearns... it went bust.
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