Major Bank Problems Exposed by Liquidity Crisis Suggest More Failures to Come

by | May 4, 2023 | Bank Failures | 45 comments

Major Bank Problems Exposed by Liquidity Crisis Suggest More Failures to Come




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The coronavirus pandemic has sent shockwaves throughout the global economy, and the banking industry is no exception. As businesses closed down, unemployment rates soared, and financial markets fluctuated, banks have struggled to maintain their liquidity and solvency.

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As the crisis drags on, experts warn that more bank failures are imminent. A liquidity crisis has exposed major problems with the banks, including their over-reliance on short-term funding and their exposure to risky loans.

One of the main issues is that banks have become increasingly dependent on short-term funding sources, such as repurchase agreements (repos) and commercial paper, to fund their operations. However, as the pandemic took hold, these funding sources dried up, leaving banks without the cash they need to cover their expenses.

In addition, banks are facing rising defaults on loans as the economic fallout from the pandemic continues. Businesses that are unable to operate have been defaulting on their loans, while consumers are struggling to keep up with their mortgage and credit card payments. This has put significant pressure on banks’ balance sheets, as they are forced to write off bad loans and reduce their lending.

To make matters worse, many banks are also exposed to high-risk loans in sectors that have been hit hard by the pandemic, such as the travel and hospitality industries. These loans are likely to default, further damaging banks’ financial health.

While governments and central banks have taken measures to support the banking industry, such as providing liquidity injections and easing capital requirements, these measures may only delay the inevitable. If the pandemic continues to impact the economy, banks will continue to face challenges in maintaining their liquidity and solvency.

Moreover, the economic impact of the pandemic is likely to linger long after the virus is under control, meaning that banks may face ongoing pressure on their balance sheets.

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Overall, the warning signs are clear: more bank failures are likely in the coming months. As the pandemic continues to cause economic disruption, banks must address the weaknesses in their business models and prepare for a challenging future. Failure to do so could result in significant consequences for both the banking industry and the broader economy.

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45 Comments

  1. Michael Reid

    I'm not even kidding when I say that the market crash and high inflation have me really stressed out and worried about retirement. I've been in the red for a while now and although people say these crisis has it perks, I'm losing my mind but I get it, Investing is a long-term game, so I try to focus on the long term.

  2. Truth Star

    Thoughts on ZION? Will recover or turn into FRC?

  3. Brian Webb

    Thx Joe Biden

  4. Rosalie Cummings

    The reason banks are closing people can't save extra money while things are getting worse.

  5. Jeffrey Morgan

    CNMD might be ok for a quick trade but their balance sheet is horrible. 1.5 months on cash runway. I’d never invest in that company.

  6. Ja Ja

    Russia, India… sending $ back to USA.

  7. Ja Ja

    This is all game for rich. They'll become even richer.

  8. ROST

    He knew.
    They all do.
    Insider trading.

  9. Steve P

    Rich elite bankers ponzi scheme that was produced to make them rich. After 2008 strict regulations were bought in and we were told that bank bailouts would never be required again. The elite invented the ponzi scheme so they could all take a slice of the free government money given out (QA). Now they will use the poors money to bail them out. Disgrace, disgrace and disgrace. They better end up in prison this time.

  10. dean Mohamed

    Becker is not a victim, he sold on inside info

  11. sakk sa

    Credit suisse

  12. KingTiger : CrownEstate

    This banking crisis not just S.V.B. but the whole thing is coming to a theatre near you as a Hollywood movie BEST believe that Hollywood is already working on turning this into a movie.

    Just like "Margin Call" with the real estate collapse.

    Anything that Hollywood can turn into a movie of some sort…they damn sure will.

    Coming to a theatre near you.

    AND the Russia Ukraine war THAT too SURE AS HELL is coming to a theatre near you as a Hollywood movie THAT when it is all said and done will be made into a LOT of various movies depicting it.

  13. sigma six

    And Money GPS said same said bank invested in over 80 BILLION in mortgage backed securities… talk about DUMPING TOXIC DEBT… stinks to high hell…

  14. TRACK ROOSTER

    Peace Anthem Remix
    Asked AI to write a song AI responded in 2 seconds..
    Write a song with the singers being Putin, Biden, Zelensky . The song should be derived from John Lennon's give peace a chance. At the end of the song can you have the Bank Of London show up to save the world while at the same time trying to enslave the human race

    Verse 1 (Putin):
    Come on Joe and Volodymyr
    Let's put our differences aside
    It's time to end this endless war
    And let peace be our guide

    Chorus:
    All we are saying is give peace a chance
    All we are saying is give peace a chance

    Verse 2 (Biden):
    I hear you Vlad and Volodymyr
    Let's sit down and talk it out
    We'll find a way to compromise
    And show the world what peace is about

    Chorus:
    All we are saying is give peace a chance
    All we are saying is give peace a chance

    Verse 3 (Zelensky):
    I'm with you Joe and Vlad
    Let's put the past behind
    We can build a better future
    And leave this conflict behind

    Chorus:
    All we are saying is give peace a chance
    All we are saying is give peace a chance

    Bridge:
    But wait, what's that we see?
    The Bank of London trying to take control
    We won't let them enslave us
    Our unity will make us whole

    Chorus:
    All we are saying is give peace a chance
    All we are saying is give peace a chance

    Outro:
    Together we can save the world
    And keep our freedom and grace
    All we need is love and trust
    And the courage to give peace a chance

  15. Das

    Are you still sure that you prefer the unsustainable profit and greed capitalism of the earth's resources and products rather than socialist sustainability ?

  16. Das

    In the UK we're still waiting for the arrest and trial of carillion executives. We don't forget

  17. Treaty

    Dah ya…of course he knew

  18. frank hanson

    Wow! That was a fantastic analysis of the SVB situation. It still astonishes me how banks are allowed to take customers deposits and invest in other financial instruments.

  19. Cloud

    Welp time to buy puts

  20. Appa Maddox

    What a goofball.

  21. Susanne Schmidt

    Eyebrows are too heavy .get new shirts

  22. Da Wanderer

    It sounds like a plan….

  23. Lana Richardson

    Maybe he was talking to Nancy about which stocks to sale.

  24. fruitloops

    Hey Steve, Powell said he was going to break stuff and there would be pain.

  25. Timothy

    YOUR ALL THE SCAMMER's AS THE DREAM OF YOUR OWN NUT's ! THIS WHY WORLD's STOP EVERY THING WHY WANT TWO KNOW WHERE MY SELF IS HURK AND HURK''s CON's YOU WAS AT HOME 1963 EARTH GARDEN 369 963 YOUR CON's GOT YOUR ASS CHIPPED AND HUNTED FOOL's WITH TOT'''s ARE TWAT''s ! FORCE ING CON's ON YOUR CON's IS ONLY CON''s PISS ANT''s HURK''s AND THE WHORE''s ! WATCH THEM BURN ALL FROM BIG MOUTH''s OF NO NO CREW >>>>>IT ALL STUNNED FOOL''s !

  26. Timothy

    OVER VALUED STOCK's AND VALUES WITH WEB MONEY THEN THE $13,000 YEAR AS DUMB ASS WIPE THINK HE ALL THAT WITH WHORE''s SELLING THE SPAWN's CRIME's AS THEY CAN ALL '''F"" OFF ! PUNK ASS HURK''s SLUT's ! AS THINK MOVING WEB MONEY FROM PRINTING YOUR TRAP IN SLID ROW AS ALL FIND's THE DUMB HEAVEN AND YOUR IN HELL PLAN''s LUMP's !

  27. neil blenkinsop

    Jail jail the fucking lot of them corrupt parasites.

  28. Danny J

    SVB CEO needs to call Paul Pelosi for some advice on how to get out of the mess he's in!!!

  29. John Follmar

    jan 6 was a set up. evidence comes out . "bank failure" look over here not at chuck and nancy framing conservatives.

  30. Lou - eye

    All by design.

  31. Bally Ragoonanan

    Let them all drown in their own falsehoods. Banks charge you for everything. They use your own money as if they worked for it

  32. Carleen Pezzuolo

    Two years of bank runs during the OBiden administration.
    There's your problem!

  33. somenoon somenoon

    Insider trading……and the politicians that committed this act should also be held accountable

  34. Bob V

    My guess: The CEO stock sale was scheduled well ahead of time IAW with an executive sales plan. Since he could not sell on demand I think he knew well in advance of the stock sales date that the bank was in trouble. They delayed the bank collapse until after the stock sales date. Insider trading in reverse. But try and prove it.

  35. Bally Ragoonanan

    Most of the headlines do not conform to the discussion that follows. What a joke!!!!

  36. Pamela

    Yes it's planned just like everything else that has been happening in the world. And they are getting away with it!

  37. Wendy Watts

    And this was in the Bible yes?? Banks will fall and soon we will be with out money unless your where MARKED with the sign of the BEAST!!!

  38. Stefan Valchev

    On March 26, 2020, the 10% and 3% required reserve ratios against net transaction deposits were reduced to 0% for all banks, essentially removing the reserve requirements altogether.

    2

    It was replaced with Interest on Reserve Balances (IORB), or interest paid on reserves the banks hold as an incentive rather than a requirement.

    3

  39. Duval Lemoine

    This guy has a christal ball, he will rent to you to make you dumber than it has made him. False News from a false genious.

  40. Tj Clinton

    Money will be thrown on the ground as the Bible foretold

  41. theresawinthrop55

    The fed is dead period, stock market being held up artificially.

  42. no no

    I seem to recall a story of Equifax stock getting dumped prior to it crashing as well. I don't recall hearing about him (CEO) getting jailed, fined, punished, reprimanded, time out.

  43. Brenda Teagarden

    The only cause is fractional reserve banking and derivatives. The cause started in 1913 and 1971 when Nixon removed gold backing of our Currency. Foolish from day 1. Oh, and by the way… currency isn’t money…. Gold and silver is money.

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