Recent study by economists don show sey 186 banks dey at risk, diz banks dey get almost di same kind of issue wey make Silicon valley Bank collapse.
Why diz 186 Banks dey at risk
SVB Collapse dis week as dia bank asset dey diminish because of increasing interest rates wey make em customers come dey withdraw all dia moni.
For di Federal Reserve’s swift rate hike campaign, di economists don evaluate each U.S Banks, dey don inspect dia asset books and market value losses. And assets like Treasury notes and Mortgage loans fit lose value when new bonds start to dey offer higher rates. Di economists also analyzed Di funding percentage of diz banks.
Focus bin dey more on funding wey Dem dey get from depositors wey no dey insured, doz ones wey dia account dey hold $250,000 and above.
Dia discovery show sey big problem just dey wait to happen, because if half of diz uninsured depositors just decide to withdraw dia moni from any of diz 186 U.S. banks, even di insured depositors go jam impairment because diz banks no get enough assets for all dia depositors. And special intervention from di FDIC go dey necessary.
E dey important to know say diz research get some kind limitation, di study no consider hedging strategies, diz strategies fit help some of diz banks against increasing interest rates.
For dia paper, di economists write say: “Our calculations suggest diz banks certainly dey at a potential risk of a run, absent oda govment intervention and recapitalization.”
Disclaimer: Our articles No be financial advice, we no be financial advisors. All investments na on your own decisions, Abeg do your own research and also find advice from financial advisor wey get license.