WSJ: economists predicted the fate of bankrupt SVB 186 American banks
Against the backdrop of the bankruptcy of Silicon Valley Bank (SVB), economists predicted a similar fate for another 186 US banks. About it informs Wall Street Journal (WSJ).
In a study published by the Social Science Research Network, experts calculated the losses of banks during the campaign of the US Federal Reserve System (Fed, local Central Bank) to raise the discount rate. They also examined the share of bank funding from uninsured depositors.
“At 186 US banks, they estimate that in the event of withdrawals by uninsured depositors, insured depositors may face depreciation because the bank will not have enough assets,” the publication notes.
The authors of the WSJ believe that in this case, the regulatory authorities should intervene in the situation.
The bankruptcy of Silicon Valley Bank became known on March 11. SVB became the biggest bank failure since the 2008 crisis. In 2022, it was valued at $40 billion, and its capitalization has grown rapidly.