Markets

The banking crisis is worsening in America, is it back in 2008 again?

The unfolding banking crisis in the United States is intensifying. Moreover, recent research suggests that US banks may be in much greater trouble.

On May 2, the British newspaper The Telegraph reported that nearly half of the 4,800 US banks are “burning their spare capital.”

Moreover, stocks in US banks are falling this week. The declines follow the May 1 takeover of First Republic Bank by federal regulators. America’s largest bank, JP Morgan Chase, will take over the bank’s deposits and most of its assets.

The report indicated that the collapses in the US commercial real estate and bond market “collided with $9 trillion of uninsured deposits in the US banking system.”

The worsening US banking crisis

Stanford banking expert Professor Amit Siru told The Telegraph that thousands of banks are underwater before adding:

“Let’s not pretend this is just about Silicon Valley Bank and the First Republic. Much of the American banking system is potentially insolvent.”

a a report Published in April, Professor Siro estimated that more than 2,315 banks currently manage assets that are worth less than their liabilities.

“The market value of assets in the US banking system is $2.2 trillion less than the book value of assets that represent held-to-maturity loan portfolios.”

Banking crisis: unrealized gains on securities – The telegraph

Some of these lenders include the largest US banks, one of which has been described as a “global umbrella entity with over $1 trillion in assets”.

Moreover, the Fed’s monetary tightening has not fully affected the economy. I have accumulated a huge wall of debt, some of it estimates He put the total US debt figure at $31.7 trillion.

Bitcoin resulted from the recent banking meltdown of the United States, which triggered the 2008 global financial crisis. Ironically, the financial parachute would be in the next impending banking disaster.

Cryptocurrency markets are flat

With banking stocks taking a beating this week, the cryptocurrency markets have rebounded slightly. There was a 1.3% increase in the total market capitalization over the last 24 hours, to $1.22 trillion.

BTC and ETH are up nearly 2% on the day but have been in a downtrend since mid-April.

Trust in banks is slowly eroding again, but lessons are not learned because it is not the first time that banks have caused a financial crisis. Maybe this time, Bitcoin will really solve this problem. However, US financial regulators probably already know this, which is why they are so determined to stifle the cryptocurrency industry.

Disclaimer

Adhering to the Trust Project’s guidelines, BeInCrypto is committed to providing unbiased and transparent reporting. This news article aims to provide accurate and timely information. However, readers are advised to independently check the facts and consult with a professional before making any decisions based on this content.

Leave a Reply

Your email address will not be published. Required fields are marked *