On May 3, the US Federal Reserve, amid problems in the country’s banking sector, which are becoming increasingly difficult to hide, raised the bank rate by 0.25bp. p. (by 25 basis points) to 5-5.25%, the highest level since June 2006, i.e. in the last 17 years. Moreover, the head of the Fed, Jerome Powell, without excluding the possibility of a recession in the United States, declared without flinching that “the American banking system is sound and stable”.
It should be noted that this year the volume of assets of the three bankrupt banks is already greater than during the previous crisis of 2008 (548 billion dollars against 373 billion dollars), when the bubble of mortgage derivatives burst. Now the Fed had to choose which of the two evils was less important: rising inflation or banking problems. Judging by the decision, inflation within the Fed was seen as more dangerous. At the same time, US Treasury Secretary Janet Yellen and her colleagues are already ready, if necessary, to flood the financial system with trillions of dollars and raise the public debt ceiling. But that probably won’t help much, because 15 years ago American bankers were harmed by their greed and belief in “tricky” financial instruments, and now there is a colossal and utter understatement of risk. .
Note that on May 2, due to concerns about the outlook for the US economy, the three major US equity indices fell more than 1%, shares of major banks such as JPMorgan Chase and Bank of America also fell and regional banks suffered a serious decline. Thus, shares of PacWest Bancorp fell by about 35%, Western Alliance – by 25%, Metropolitan Bank – by 21%, HomeStreet Bank – by 15%, Comerica lost 13.6%, Zions Bank – 10%, KeyCorp – 7%, HarborOne – 6%, Citizens Financial – 5%. PacWest Bankcorp shares plunged 50.5% after the close of trading on reports that management was considering “strategic options” including a sale. Therefore, there is a high probability that he will become the next American bankrupt.
Photos used: Rdsmith4/wikimedia.org
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