After the collapse of the Silicon Valley Bank and Signature Bank, President Biden called on Congress to make it easier for regulators to hold failed banks accountable. Former Vice Chair of the FDIC Thomas Hoenig joined the Meet the Press NOW roundtable with his analysis.
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#SiliconValleyBank #Biden #Finance…(read more)
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The decision by the Federal Reserve to hike interest rates in 2008 may have been well-meaning, but it ended up shocking the economy and had a significant impact on the banking industry. At the time, banks were already under stress due to the subprime mortgage crisis, and the rate hike only served to make matters worse. According to former Federal Deposit Insurance Corporation (FDIC) vice chair Thomas Hoenig, the decision contributed to bank failures and damage to the economy.
In an interview with CNBC, Hoenig said that the rate hike “was a shock that the system wasn’t ready for.” At the time, the Fed had been keeping rates low to encourage lending and stimulate the economy. However, when inflation began to rise, the Fed felt compelled to raise rates to combat it. The problem was that the banking industry was not prepared for the sudden change in policy.
The rate hike had three major effects on the banking industry. First, it increased the cost of borrowing for banks, which hurt their ability to lend to customers. Second, it made it more difficult for banks to attract deposits, as higher rates for savers meant it was more expensive for banks to fund their operations. Finally, it hurt the value of the assets on banks’ balance sheets, as higher rates made it more expensive for customers to repay their loans.
These effects put many banks under tremendous stress, and many of them failed as a result. According to Hoenig, the rate hike “was one of the contributing factors to the financial crisis.”
The lesson to be learned from the rate hike is that monetary policy can have unintended consequences. While the Fed’s decision was well-meaning, it ended up having a negative impact on the economy. Policymakers need to be aware of these unintended consequences and factor them into their decision-making process.
Hoenig’s comments come at a time when the Fed is once again considering raising interest rates. While the banking industry is in a much stronger position now than it was in 2008, policymakers need to be mindful of the potential consequences of raising rates too quickly or too aggressively.
In short, the rate hike in 2008 was a shock to the system that contributed to bank failures and damage to the economy. It serves as a reminder that monetary policy can have unintended consequences, and that policymakers need to be aware of these consequences when making decisions.
Californians can achieve your American Dream (first time home buyers), get that 20% for that down payment.
To save ur country but all world are suffering to buy food becoz of dollar ! Pls end dollar currency
This crisis is just another example of the Biden administration’s inability to be competent
Hier Staat China Armija sonnst schiesse ich sofort 4 Staat USA US ARMY Flugzeugträger ab nach der tat Atom Kraft Werk Fukushima Abschuss mit Staat USA US ARMY Atom Rakete kel Staat USA Versicherung Geld bezahlen sonnst schiesse ich Staat China Armija sofort 4 Staat USA US ARMY Flugzeugträger ab Code : 749 Meter hoch Chicago City Tower Code Nummer 4 – – – – – > 4 Staat USA US ARMY Flugzeugträger 7 ist dann der Teipei Tower da wollten sie auch eine Atom Rakete oder eine Balistische Rakete werfen ohne grund sie sagten Bordell Hollocost Start mit Staat USA zusammen die Staat China Nacht Damen
Hier Darcho Jandreoski Pegasus Galaktica 7 – Die Staat USA US ARMY hat eine Atom Rakete geworfen in das Atom Kraft Werk Fukushima Jahr 1988 / 1989 CODE : 749 meter Chicago City Tower ist hoch habe ich im Erdkunde Buch gelesen gerade Digitale Bild zeigte sich das Die USA US ARMY Atom Rakete in das Atom Kraft Werk Fukushima geworfen hat und 2 Balistische Raketen in Staat China Territorium bestimmt in die Stadt Shanghai die wollten gleich in Staat Japan Einmarschieren – Staat China Armija hat dann in Staat USA angerufen und wollte Geld haben von der Staat USA Versicherung und wollte fragen was das soll.
Greedy SVB their Ceo lobby to reduce the law during Trump so they can start buying all those risky investments so they can make their pocket full
Interest rate is currently at 4.75%(8th rate hike since March last year) Inflation at 7% and mortgage rates is at over 7.5% but yet minimum wage remains the same and my retirement portfolio has suffered tremendously these past years, so my question is how do senior citizens retire and live off such unstable economy. The long term game is obviously not for me at this point.
I'm really worried about the current bank crisis. If a bank as big as SVB could fail, I fear for a lot more. I know a friend who is running a high-growth startup, and was badly hit by the bank run. I have pulled out more than $340k from my bank. After all, the FDIC covers only up to$250,000, and the implosion could have bad effect. Looking to invest into the stock market now. Does anyone know how I could go about it?
blame the fed for giving free money for free by quantitive easing, stop giivng free koney and let those trash company fail so we can have a better companies who are financially sound
So they can put 30 billion into a bank but not 30 billion into American citizens bank accounts. The devil is a liar for real.
Remember when Ben Bernanke saved capitalism back in 2008 with QE?
I guess he didn't. He just kicked the liquidity crisis can down the road.
Wait, he just said “that’s capitalism” working. Didn’t know you can get a bailout in capitalism.
Hold it! I have known that interest rate hikes were coming for two years. I work as a waiter. What is the excuse for DVB management? (Not one Canadian bank needed a bailout in 2008-09, and we haven’t seen a bank go under in 40 years. Come up and see how we do things.)
The banking systen is sound?! Including MY bank account? The lies are outrageous!!!
All the rate hikes(Fed) in the world can't do anything if the Treasury prints into infinity and Congress spends like a drunk sailor.
It's not the high rates that got us into this mess, it's that we had ZERO rates for over a decade. Come on, FED, you have one job!