The emblem of the US Federal Reserve. Photo: Graeme Sloan/Sipa USA/Legion-Media.
US authorities continue to affirm that the banking system remains “sound and resilient” despite decreases in deposits, the bankruptcy of Silicon Valley Bank (SVB), the closure of Signature Bank, and the crisis in the First Republic Bank, not to mention the crises in European banking conglomerates Credit Suisse and Deutsche Bank.
Recent data published by the US Federal Reserve reports that between March 8 and 15, during the period surrounding the bankruptcy of Silicon Valley Bank (SVB) and the closure of Signature Bank, US banking customers withdrew $98.4 billion.
The data shows that the largest withdrawals, totaling $120 billion, were at small banks, while deposits at large banks increased by $67 billion. The withdrawals reduced total deposits in the US bank system to just over $17.5 trillion.
This is the chart for First Republic Bank pic.twitter.com/LFH0SHfMou
— Benjamin Cowen (@intocryptoverse) March 24, 2023
On Friday, US Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell participated in a special closed-door meeting of the Financial Stability Oversight Council, during which US officials discussed the current situation in the country’s banking sector.
In a statement released after the meeting, the board noted that “while some institutions have come under stress, the US banking system remains sound and resilient.” In addition, the board decided that US economic bodies should monitor financial performance more closely.
Europe’s Financial Giant Begins to Fall After US Financial Instability (+Bitcoin)
On March 10, the US banking system experienced the largest bankruptcy since the 2008 financial crisis: SVB, the 16th largest bank in the country, collapsed after depositors, mostly linked to the sector’s technology and venture capital-backed companies, were advised to withdraw their money as concerns about the crisis spread.
Two days later, regulators shut down New York-based Signature Bank, which was heavily involved in the cryptocurrency industry, due to systemic risks and to prevent industry contagion. After that, First Republic Bank was also forced into the fray after failed attempts to revert the crises through announcements regarding an unsuccessful buyout from financial corporations.
According to British macroeconomist Philip Pilayington, in the event of the collapse of Deutsche Bank, the crisis will reach a new level pic.twitter.com/BR7jorHuzQ
— S p r i n t e r F a c t o r y (@Sprinterfactory) March 26, 2023
Meanwhile, in Europe, the crisis in the financial giant Credit Suisse has remained unresolved despite massive support from the Swiss National Bank to salvage one of its oldest financial institutions, while in Germany, Deutsche Bank has been showing a sharp decline in its stock exchange value also due to uncertainties regarding its financial strength.
Parallel to these events, a sharp increase in the price of gold and Bitcoin serves as evidence of negative consumer perception about the future of the financial system.
(RT) with Orinoco Tribune content
Translation: Orinoco Tribune
OT/JRE/KZ
