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Will the banking crisis sink the United States?

Bank crisis alert, how much risk is the US in?

It is the crisis that worries American investors and savers American banks pass.

The biggest fears come from bankruptcies, which some institutions have been embroiled in in recent months.

The question many observers are asking is the following: American power is in danger?

The crisis of offshore banks is getting worse and is giving a glimpse at the moment Gloomy outlook for the financial stability of the United States of America.

Over the past few days, bank stocks have faced more losses.

On the other hand, investors are starting to evaluate what The real health status of the entire sectorafter bankruptcy First Republic Bank.

at present It seems that trading is still particularly volatile: With the collapse of the First Republic Bank, we have reached the number of four failed banks during the year 2023.

We remind you that on Monday, JPMorgan He came to the rescue of the failing bank, after a US government-led deal.

However, the system is creaking, in a particularly complex period for the United States of America, namely Affected by recession, debt ceiling issues and banking fragility.

The American banking crisis is not over yet

In the past few days, something has been winding up under the magnifying glass backquestwhich fell as much as -60% in after-hours trading on Wall Street.

Western Alliance Bancorp is also under attack.

The thing to worry about, either way, is the similarity with svb And First Republic Bankwhich has been highlighted before Federal Deposit Insurance Corporation.

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They are registered Huge inflows of deposits and huge losses on long-term assets.

They also recorded sharp declines Zion Bancorp And Trust Financial Corp.

Just to get an idea, though kwb extensionanyRegional Banking Indexduring this week arrived lose 8% It reached its lowest level since 2020.

As for the First Republic Bank, the problems stemmed directly from some bad investments and a real outflow of deposits.

Another matter, however, for PacWest and Western Alliance, which published its results in April: In this case, the deposit bases stabilized. This should have been an encouraging sign for investors.

American economy, what could happen now?

Investors and observers are beginning to warn of the potential fallout from this wave of US bank failures.

David HuntDirector general pgimmake it clear that at this moment it will only be and will begin to glancing What are the possible consequences for the US economy.

second Rishi Kapoor to InvestcorpHowever, there is no doubt that the impact of the collapse of US banks will lead to binding financial conditions.

One of the weaknesses of US regional banks is that Exposure to commercial real estatewhich in recent months has become an endangered sector.

the reason? their exposure at higher interest rates And concerns about the fact that the spread of working from home could reduce the demand for offices.

Charlie Munger to Berkshire HathawayHe explained, during an interview with the Financial Times, that regional banks are full of distressed commercial real estate loans.

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Earl Warner

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