'Run on UK' sees foreign investors pull $1 trillion out of the City

A silent $1 trillion "Run on Britain" by foreign investors was revealed yesterday in the latest statistical releases from the Bank of England. The external liabilities of banks operating in the UK – that is monies held in the UK on behalf of foreign investors – fell by $1 trillion (£700bn) between the spring and the end of 2008, representing a huge loss of funds and of confidence in the City of London.

Some $597.5bn was lost to the banks in the last quarter of last year alone, after a modest positive inflow in the summer, but a massive $682.5bn haemorrhaged in the second quarter of 2008 – a record. About 15 per cent of the monies held by foreigners in the UK were withdrawn over the period, leaving about $6 trillion. This is by far the largest withdrawal of foreign funds from the UK in recent decades – about 10 times what might flow out during a "normal" quarter.

Link to Article

I am not sure what to make of this yet. I suppose this is merely people pulling their money out of the banks so to speak.

Two interesting notes to me in this article is comparing the situation to Iceland and the fact that a lot of the Foreign invests pulled were from Tax Haven places, like Switzerland and Caymans.

[edit on 9-3-2009 by Anonymous Avatar]