The perfect mix of losses, uninsured leverage and a greater loan portfolio, among other factors, resulted in the fall of Silicon Valley Bank (SVB). Comparing SVB’s situation with other players revealed that nearly 190 banks operating in the United States are at potential risk of a run.
While SVB’s collapse came as a reminder of the fragility of the traditional financial system, a recent analysis by economists showed that a large number of banks are just uninsured deposit withdrawals away from a devastating collapse. It read:
"אפילו אויב בלויז האַלב פון אַנינסוערד דאַפּאַזיטערז באַשליסן צו צוריקציען, כּמעט 190 באַנקס זענען אין אַ פּאָטענציעל ריזיקירן פון ימפּערמאַנט צו פאַרזיכערט דאַפּאַזיטערז, מיט פּאַטענטשאַלי $ 300 ביליאָן פון פאַרזיכערט דיפּאַזאַץ אין ריזיקירן."
Monetary policies penned down by central banks can have a negative impact on long-term assets such as government bonds and mortgages, which can, in turn, create losses for banks. The report explains that a bank is considered insolvent if the mark-to-market value of its assets — after paying all uninsured depositors — is insufficient to repay all insured deposits.
The data in above graph represents the assets based on bank call reports as of Q1, 2022. Banks in the top right corner, alongside SVB (with assets of $218 billion), have the most severe asset losses and the largest runnable uninsured deposits to mark-to-market assets.
The recent rise in interest rates, which brought down the U.S. banking system’s market value of assets by $2 trillion, combined with a large share of uninsured deposits at some U.S. banks, threatens their stability.
“Recent declines in bank asset values significantly increased the fragility of the US banking system to uninsured depositors runs,” the study concluded.
פֿאַרבונדענע: ברייקינג: SVB Financial Group טעקעס פֿאַר טשאַפּטער 11 באַנקראָט
As the federal government steps in to protect the depositors of SVB and Signature Bank, President Joe Biden assured no impact on taxpaying citizens.
דאַנק צו אַקשאַנז וואָס מיר האָבן גענומען אין די לעצטע טעג צו באַשיצן דאַפּאַזיטערז פון סיליקאָן וואַלי און סיגנאַטורע באַנקס, אמעריקאנער קענען האָבן בטחון אַז אונדזער סיסטעם איז זיכער.
מענטשן ס דיפּאַזאַץ וועט זיין דאָרט ווען זיי דאַרפֿן זיי - אָן קיין קאָס פֿאַר די שטייער.
- פרעזידענט בידען (@POTUS) מאַרץ קסנומקס, קסנומקס
However, many pointed out to Biden on Twitter אַז “everything you do or touch costs the taxpayer!”
Source: https://cointelegraph.com/news/more-186-us-banks-well-positioned-for-collapse-svb-analysis-reveals