Bank crises could kill thousands, says uni research

1 March 2008

Emily Andrews

Thousands of people could die if the Northern Rock crisis becomes a precedent for further widespread banking disasters, new research by Cambridge University shows.

The startling warning comes as a new study suggests that the number of heart attacks could escalate by as much as 6.4% in high-income countries (such as Britain and the U.S.) due to stress, if “a significant proportion of banks” were to fail as Northern Rock did last year. In developing countries such as India, this figure could be as high as 26%.

The elderly would be most at risk, since they are most sensitive to acute stress and may have existing cardiovascular problems. They are also most likely to fear for their life savings.

In the wake of the Northern Rock crisis, academics from Cambridge University’s Department of Sociology compared data about male cardiovascular mortality rates per 100,000 of population from the World Health Organisation with data from the World Bank between 1960 and 2002, defining a banking crisis as “an episode in which a significant proportion of banks fail or their assets are exhausted.” The resulting report, entitled Can A Bank Crisis Break Your Heart?, indicates that the number of deaths from heart attacks soars regularly and briefly ever time there is a systemic bank failure. It also suggests that financial concerns produce similar stress to that provoked by earthquakes, wars, or even terrorist incidents.

David Stuckler, who led the research, asserts that even temporary problems on the market can cause dangerous levels of panic, as manifested in the queues outside Northern Rock last year. He also claims that media scare-mongering only exacerbates the problem and urges that it is important to “contain hysteria” not only to stop a “momentary blip on the financial scene” leading to a widespread banking meltdown, but also to prevent potentially thousands of deaths from heart disease.

In the UK nearly 6000 people lose their lives to heart and circulatory disease every day.