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US Banking is in mess: Study

US Banking is in mess: Study

A new study has found that 186 US banks are at risk of meeting a similar fate, after the collapse of the Silicon Valley Bank, The major reasons for this are rising interest rates and high proportion of uninsured deposits, said the report.

The Social Science Research Network study, named 'Monetary Tightening and US Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs?', says that 186 banks could fail if even half of their uninsured depositors withdraw their funds.

"Even if only half of the uninsured depositors decide to withdraw, almost 190 banks are at a potential risk of impairment to insured depositors, with potentially $300 billion of insured deposits at risk," says the report.

The regulator's role needs to be studied for the reason for this current crisis. 

US Banking is in mess: Study

US Banking is in mess: Study

A new study has found that 186 US banks are at risk of meeting a similar fate, after the collapse of the Silicon Valley Bank, The major reasons for this are rising interest rates and high proportion of uninsured deposits, said the report.

The Social Science Research Network study, named 'Monetary Tightening and US Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs?', says that 186 banks could fail if even half of their uninsured depositors withdraw their funds.

"Even if only half of the uninsured depositors decide to withdraw, almost 190 banks are at a potential risk of impairment to insured depositors, with potentially $300 billion of insured deposits at risk," says the report.

The regulator's role needs to be studied for the reason for this current crisis. 

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