More bank failures raise concerns

by | Mar 27, 2023 | Invest During Inflation | 20 comments




Treasury Secretary Janet Yellen said the government will remain vigilant and take additional steps as needed to support the banking system….(read more)


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As the global economy continues to suffer the consequences of the COVID-19 pandemic, concerns are growing over the potential for more bank failures in the near future. Economists and financial experts are warning that the ongoing economic disruption could push some of the world’s most vulnerable banks over the edge, risking a new wave of bank failures that could further amplify the economic shockwaves already being felt.

Many countries have already experienced significant banking disruptions due to the pandemic. For example, in the United States, the Federal Deposit Insurance Corporation (FDIC) closed 5 banks in 2020, up from just one in 2019. Furthermore, the World Bank recently predicted that the Covid-19 pandemic could cause a collapse in the global financial system, potentially leading to a significant increase in the number of banks at risk of failure.

There are a few key factors that are contributing to the growing concerns over bank failures. One is the continued uncertainty in the global economy. With the pandemic still raging in many parts of the world, it remains unclear when, or if, a return to normalcy can truly be achieved. This uncertainty makes it difficult for banks to accurately assess their risk, which can put them in a precarious position.

Another factor is the ongoing low interest rates. Lower rates can make it more difficult for banks to generate profits, which can put undue pressure on their balance sheets. Banks also rely on interest rates to lend money to customers, which can generate significant revenue. However, with rates so low, banks may struggle to generate enough income to keep up with their obligations.

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Finally, there is the issue of non-performing loans (NPLs), which are loans that are not being repaid on time or at all. NPLs can be a major burden for banks, as they can lead to significant losses that can erode their capital base. During the pandemic, there has been an increase in personal and corporate bankruptcies, which can contribute to a rise in NPLs for banks.

To address these concerns, many governments are putting in place measures to support their local banking sectors. For example, the US Federal Reserve has introduced a number of programs to help banks weather the storm, including asset purchases and lending programs. The European Central Bank has also introduced various measures, such as a lending program for banks to support small and medium-sized businesses.

The bottom line is that the risk of bank failures is a real concern in the current economic environment. While there are no guarantees, governments and central banks are doing what they can to support the banking sector and mitigate the potential damage. However, it is clear that the economic disruption caused by the pandemic has put banks in a precarious position, and we may yet see more bank failures before the crisis is over.

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20 Comments

  1. Sh Hu

    Lol….

  2. AFRoSHEEN T3 Arc Michael

    We'll bail you out but you can't collect $200 for passing Go. THIS time around. I didn't know life was just some game. People die when the unemployment rate goes up. Does anybody out there have hearts anymore? Hello!? I'm asking you heartless do you? Why is it animals don't need money or banking and we're intelligent yet all dependent on some system that doesn't give a f**k about us? All over what? Status? If God's real believe me he doesn't give a f**k about your pathetic status.

  3. Frank Newman

    I’m from the government and I’m here to help

  4. NHAN HA

    And they did plan do something else and borrow monies then they will plan do the same bankruptcy again

  5. NHAN HA

    Therefore the CEO or the president of the company go out business subject further investigation and secruity because they are extreme rich

  6. NHAN HA

    There are rating interest rate for certain group as do thing unsafe but for the laws and orders group that need help we must assist these victims for group non compliance for earn big disregard the nation safety

  7. NHAN HA

    If there are reasons fail stock from bank that has member of the politicians earn big and bank president as well as CEO. These guys also own stock and sale stock. That cause the fail region bank it is the crime

  8. NHAN HA

    The regulate about the existing businesses and companies and consumers across 50 states

  9. NHAN HA

    The chairman is watching the committee. This guy we did vote and he had permanent position as chairman un change

  10. NHAN HA

    The bank also has the president why this guy plan to do something else by declare the bankruptcy while still rich and borrow monies with the CEO

  11. NHAN HA

    The bank is the livelihood of the market that connect to the consumers and as well as to protect passive industries and active industries aboard.

  12. NHAN HA

    The bank under the committee watch and we have the chairman alway care all banks function in the bad time and good bank

  13. Steve Lai

    can't trust the govt。I got allmy money out before they clolapse like domino。 by then the govt simplysay sorrynomoney ingo around

  14. Kathy Mannen

    Why do all these old people who can hardly speak, keep screwing up our economy. They can only feed their fat bodies.

  15. fushion M

    The money game started in 1971 is failing and the reality is that everything that has a starting point also has an ending point. The time is now.

  16. Brian Marcelo

    Blame the people who voted for diaper boy

  17. Andrew

    When they say everything is okay and don't panic….that when you should panic.

  18. ricardo stoute

    So while one system of oppression breaks can we normalise people ditching european suits for their traditional wear??

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