2023-05-17 22:10:12
Los failing banks They now have the perfect excuse to clean up their guilt and add unimputable enemies to their victims. The statements these days in the US from the banks that went bankrupt this year due to a flight of deposits are in this vein. Looking for scapegoats and find them easily in the social networks, in anonymous correveidiles, as in the past but multiplied by a lot. In the groups of lawyers, people now regularly wonder if interest rates will rise, how much loans cost, high inflation or how little money banks give for deposits. Future answers to these questions cannot be conclusive. Not even the great economic gurus are able to reliably determine clear answers. The cliché always remembers that economists are capable of calculating figures (usually approximate) and deadlines or dates, but never linking both elements precisely in the same sentence. The US banking crisis of this 2023, which some insist has already been appeased, had its diffuse beginning in the decisions of the Federal Reserve itself and its fight against inflation. The idea is that the sharp and rapid rise in interest rates caused a dissociation between the price of money and the remuneration of the accounts by the banks. The practical rationale often referred to is that if banks do not pay customers for the money they hold, that money tends to move. In the US, this phenomenon is usually more acute than in Europe.
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If the value of the assets or their profitability (stock market, bonds or real estate investments) falls in this upward trend, many banks have to recapitalize. It is necessary to think that the banks do not have in liquidity more than a very small part of the money that the savers have deposited. If any flame of distrust appears, customers get money faster. If all customers withdraw their deposits at the same time for fear that the bank will fail, the bank ends up failing. And social networks are motor and air for the flame of mistrust. That’s what happened to him First Republic Bank, el Silicon Valley Bank y el Signature Bank.
In these processes of doubt, the regulators of the financial system, the FED and the ECB, have a basic mission and contain fears. But at the same time, the rise in rates is a problem for those banks that do not dare to remunerate deposits and start a trade war without sufficient resources. Thus, it can be said that it is credible that interest rates cannot go much higher in the coming months so as not to threaten the smaller banks. But it is not possible to specify deadlines. It remains to be seen what the ECB will give priority to in its future decisions on the price of money, inflation or financial stability. Indebted families, for once, are in line with the interests of the banks. Stopping the rise in interest rates is advisable.
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