The run on a small rural lender in Jiangsu Province last week underlines the urgent need for Chinese authorities to come up with a framework to protect retail depositors and wind down insolvent banks. On Monday, depositors queued up to withdraw their money from Jiangsu Sheyang Rural Commercial Bank in the city of Yancheng on rumours that it had turned down a request to withdraw Rmb200,000 (US$32,680). The panic soon spread in the city to other banks, which, come Wednesday, were exhibiting stacks of cash to try and calm depositors.
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