15 Banks Collapsing All Around Us
America is about to see a cascade of bank failures, and the future of hundreds of regional banks is on the line right now. The collapse of Silicon Valley Bank, Signature Bank, Credit Suisse and First Republic marked the start of a reckoning in a sector that is being severely impacted by rising interest rates, souring loans, lower deposit rates, and falling profits in 2023. Many institutions have high exposure to risky assets, something that account holders will probably only find out after a major crisis erupts and they can no longer withdraw their funds. Regional banks are particularly endangered due to the fact that the Federal Reserve’s aggressive interest rate hikes have eroded the value of bank assets such as government bonds and mortgage-backed securities. Most bonds pay a fixed interest rate that becomes attractive when interest rates fall, driving up demand and the price of the bond. In contrast, if interest rates rise, investors will no longer prefer the lower fixed interest rate paid by a bond, thus driving down its price. No wonder why some institutions have lost more than 80% of their market capitalization this year.
For example, Pacific West Bank may be the fourth California bank to fall this year. According to Ed Moya, a senior market analyst at Oanda, the company's terrible performance on financial markets is a major indicator of trouble. The bank recently revealed that outflows started to rise again, leading its shares to drop 22.7% in a single day, which further extended its recent declines. PacWest’s shares have now fallen more than 50% this month and nearly 80% for the year. Adding assault to injury, the bank said in a securities filing that its deposits declined 9.5% in the last quarter. “PacWest is starting to look like the weakest link and some traders are wondering if they will fail or have a sale,” Moya revealed.
“Our calculations suggest these banks are certainly at a potential risk of a run, absent other government intervention or recapitalization,” economists with the Social Science Research Network wrote in a new report. “The recent declines in bank asset values very significantly increased the fragility of the U.S. banking system to uninsured depositor runs,” they noted.
A run on these banks could pose a risk to even insured depositors − those with $250,000 or less in the bank − as the FDIC’s deposit insurance fund starts incurring losses. These institutions represent just a small share of the more than 200 banks that are vulnerable to the same type of risk that took down Silicon Valley Bank. The potential impact of all of these institutions being at risk at the same time could be significant for the banking sector and the broader economy. If a small number of these banks were to fail, it could lead to a domino effect, causing other banks to fail as well. This could create a nationwide credit crunch, making it even more difficult for businesses and consumers to access credit and slowing economic growth.
The truth is that a single bank run on one of these vulnerable institutions could cause a ripple effect, leading depositors to withdraw funds from other banks as well. That would spark panic on financial markets and the public could lose confidence in the banking system as a whole, a scenario similar to what happened when the Great Depression started to unfold in the 1930s. It seems that a financial crisis may erupt sooner than we all thought, and we are certainly no prepared to deal with its repercussions. And the companies listed in this video could be the next to break down all around us.
Видео 15 Banks Collapsing All Around Us канала Epic Economist
For example, Pacific West Bank may be the fourth California bank to fall this year. According to Ed Moya, a senior market analyst at Oanda, the company's terrible performance on financial markets is a major indicator of trouble. The bank recently revealed that outflows started to rise again, leading its shares to drop 22.7% in a single day, which further extended its recent declines. PacWest’s shares have now fallen more than 50% this month and nearly 80% for the year. Adding assault to injury, the bank said in a securities filing that its deposits declined 9.5% in the last quarter. “PacWest is starting to look like the weakest link and some traders are wondering if they will fail or have a sale,” Moya revealed.
“Our calculations suggest these banks are certainly at a potential risk of a run, absent other government intervention or recapitalization,” economists with the Social Science Research Network wrote in a new report. “The recent declines in bank asset values very significantly increased the fragility of the U.S. banking system to uninsured depositor runs,” they noted.
A run on these banks could pose a risk to even insured depositors − those with $250,000 or less in the bank − as the FDIC’s deposit insurance fund starts incurring losses. These institutions represent just a small share of the more than 200 banks that are vulnerable to the same type of risk that took down Silicon Valley Bank. The potential impact of all of these institutions being at risk at the same time could be significant for the banking sector and the broader economy. If a small number of these banks were to fail, it could lead to a domino effect, causing other banks to fail as well. This could create a nationwide credit crunch, making it even more difficult for businesses and consumers to access credit and slowing economic growth.
The truth is that a single bank run on one of these vulnerable institutions could cause a ripple effect, leading depositors to withdraw funds from other banks as well. That would spark panic on financial markets and the public could lose confidence in the banking system as a whole, a scenario similar to what happened when the Great Depression started to unfold in the 1930s. It seems that a financial crisis may erupt sooner than we all thought, and we are certainly no prepared to deal with its repercussions. And the companies listed in this video could be the next to break down all around us.
Видео 15 Banks Collapsing All Around Us канала Epic Economist
Показать
Комментарии отсутствуют
Информация о видео
Другие видео канала
The Commercial Real Estate Crisis Of 2024 Is Going To Be A DoozyIt's Over! The Middle Class Is Being Wiped Out - It's More Than What You Think15 Fast Food Chains Shutting Down In 202415 Foods You Should Stockpile That Will Never Expire15 Ways To Survive An Attack On A Large CityChina's Stock Market Tumbles: The Hong Kong Crisis Deepens - $6 trillion Market Wipe Out15 Shortages That Will Hit Grocery Retailers Next Month15 Cheap Survival Items That Will Become Priceless In The Months AheadThe Credit Crisis Will Affect Everyone And It Is Worse Thank You Think20 Great Depression Era Foods We Will Need SoonGas Prices Will Hit Record Levels In September As Inventory Outages Hit StationsA Retirement Nightmare Is Already Upon Us And It Will Destroy Millions Of American Families15 Big Box Retailers That Report Massive Grocery Price Increases In 2023Meat Prices Will Triple In The Coming Weeks As Grocery Stores Struggle With Shortages15 Big Restaurant Chains That Filed For BankruptcySubway Reports Biggest Store Shutdowns In Two Decades As Fast Food Chains Collapse All Around UsGas Stations Will Run Out Of Fuel And Prices Will Explode This Summer As Supplies CollapseAmazon CEO Warns About Perfect Storm As Retail Business CollapsesBrace For A Car Price Crash Of Unprecedented Proportions As Auto Market Collapse IntensifiesDomino's Closing Multiple Stores As Retail Apocalypse Hits America's Largest Restaurant Chains