A Silicon Valley Bank (SVB) analysis by economists revealed that 186 banks may be prone to similar risks.
The interest rate hike policy of the USA reduced the market value of the assets of the banking system in the country by $ 2 trillion. Alongside emerging factors was the collapse of the SVB as a result of a mix of losses, uninsured deposits and a larger loan portfolio. Analyzing these processes and the results of the SVB, economists claimed that 186 banks operating in the USA also have a potential bankruptcy risk.
SVB Analysis Reveals 186 Risky US Banks
Economists made an analysis on the latest Silicon Valley Bank (SVB). This analysis revealed that there are 186 U.S. banks where even insured depositors could face impairment if half of uninsured depositors withdrew their funds quickly.
Commenting on the analysis, the economists said, “Our calculations show that these banks are certainly at risk of potential bankruptcy in the absence of further government intervention or recapitalization.” said.
According to economists, the collapse of the SVB reminded of the fragility of the traditional financial system. According to economists, this vulnerability could have a negative impact on long-term assets such as monetary policies, government bonds and mortgages.
The financial experts who prepared the analysis claim that the US policy of increasing interest rates may reveal many SVB-like stories.
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