US banking crisis: Near 190 banks could collapse, in keeping with study
With the failure of three regional banks since March, and one other one teetering on the brink, will America soon see a cascade of bank failures?
Bloomberg reported Wednesday that San Francisco-based PacWest Bancorp is mulling a sale.
Last week, First Republic Bank became the third bank to collapse, the second-largest bank failure in U.S. history after Washington Mutual, which collapsed in 2008 amid the financial crisis.
After the demise of Silicon Valley Bank and Signature Bank in March, a study on the fragility of the U.S. banking system found that 186 more banks are vulnerable to failure even when only half of their uninsured depositors (uninsured depositors stand to lose a component of their deposits if the bank fails, potentially giving them incentives to run) resolve to withdraw their funds.
“The collapse of 4 US banks in the previous few months with over US$500 billion in combined assets is tough to dismiss, especially within the context of a slowing economy, reined in by policy rates which have risen sharply over the past yr and capped by this week’s 25bp hike.” – MS
— zerohedge (@zerohedge) May 7, 2023
Lehman Brothers declared bankruptcy on Monday September fifteenth 2008.
Is Charles Schwab in trouble? pic.twitter.com/rU6k04TUlq
— Financelot (@FinanceLancelot) May 7, 2023
The selloff in US bank shares is threatening to push them below a technical threshold that might signal more pain ahead for the broader stock market. pic.twitter.com/2ksHi9qkmc
— Cheddar Flow (@CheddarFlow) May 7, 2023
Fitch places PacWest Bancorp on rankings watch negative.
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