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> On the heels of Silicon Valley Bank’s collapse earlier this month, 186 more banks are at risk of failure even if only half of their depositors decide to withd
by armada651 4y ago
> On the heels of Silicon Valley Bank’s collapse earlier this month, 186 more banks are at risk of failure even if only half of their depositors decide to withdraw their funds, a new study has found.
Which is something that normally doesn't happen, a bank simply can't function in an environment where such large bank runs are a common occurrence.
- detourdog 4y agoThe SVB situation exposed such weird kink in the Fed's financial plan. The whole economy would be forced to contract to fill the gap between credit and deposits. I think the Federal Reserve is doing a good job. Wiping out the corporate books and trying to divide the assets among the depositors makes sense. I believe the Banking industry making up depositors shortfall makes sense. The Banking industry should be responsible for failures of their members. The federal reserve being the regulator with some sort of role.
- AnimalMuppet 4y agoNot so. There are over 4000 banks. If 186 would fail in that situation, that means that 95% of them would not fail in that situation. So most banks can function in that environment. (Unless the study just looked at 200 banks or something...)
- detourdog 4y agoYes, everything I have heard so far seems like they handled the situation well and everything seems to be working. I was impressed that the quickly analyzed the problem with 10 year bonds and set-up an appropriate system for the next bank. They did that over the weekend.