After the recent bank crash in the US, a number of people believe that more failures are coming after the Federal Reserve increased its benchmark interest rate by 25 basis points. American journalist Charles Gasparino insists that the “low-wage” addicts of Wall Street are ignoring the US banking crisis. Danielle DiMartino Booth, CEO of Quill Intelligence, confirms that the banking industry is facing problems that “nobody wants to call a banking crisis.”
Ignore the American banking crisis
There were many opinions And formulations From financial experts and officials in the aftermath of the failures of three major US banks. All four major stock indices ended the day in the green on Friday following the Federal Reserve Starch The Fed funds rate increased by 25 basis points two days ago. Journalist, radio host and financial commentator Charles Gasparino wrote an op-ed over the weekend claiming that “the modern-day stock market is addictive.” Gasparino believes the higher rates “painfully reveal” the “rotting within the banking system”.
He adds that commercial bankers took a “wild gamble”, and the failures of Silicon Valley Bank and Signature Bank highlight this problem. “There will be others, up to twenty people,” Gasparino explains. They all have remarkably similar balance sheets to SVB and Signature. If things continue to improve, they are poised to crash as well, ensuring a severe recession.” By chance, a paper Published on March 13 by researchers at New York University shows that US banks incurred unrealized losses of $1.7 trillion in December 2022.
correspondent Editorial opinion, reported by the New York Post, also mentions First Republic Bank, insisting that First Republic “made some of the same terrible portfolio choices as SVB.” Gasparino doesn’t believe people should “trust stock junkies.” Gasparino compares the recent Thursday-Friday stock market rally to “the dizzying giddiness of a junkie who just got his fix whenever he hears that lower prices are imminent.” While traders may want lower rates, Federal Reserve Chairman Jerome Powell recently stressed That “interest rate cuts are not in our base case,” and he insisted, “inflation is still very high.”
And Danielle DiMartino Booth, writer and CEO of Quill Intelligence, expects more bank failures. booth Discuss the topic With Kitco News anchor Michelle McCurry, and reporting on issues surrounding First Republic commercial bank. Booth noted that “we haven’t seen the biggest banks going up,” and many of these troubled banks are “sitting in no man’s land.” Furthermore, Booth claims that a precedent was set after the Federal Reserve, Treasury and FDIC bailed out SVB and signed on.
“The precedent has been set,” Booth told McCurry, “and it cannot be undone.” “As regulators, it is not your job to pick winners and losers, but this is the angle that (the US government) has backed itself into when it has backed all Signature and SVB uninsured deposits. We are in the midst of a banking crisis with nobody He wants to call it a banking crisis.”
What do you think needs to be done to prevent further banking crises in the US? Tell us what you think about it in the comments section below.
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