That’s how Jason Brett, regulator of the Federal Deposit Insurance Corporation (FDIC) during the housing crisis, says he feels about recent bank failures. In the last 2 weeks there has been a domino effect, causing one regional bank to fail after another. It started with Silicon Valley Bank and, although for other reasons, it has reached Europe with the purchase of Credit Suisse by UBS. Why UBS’s deal with Credit Suisse threatens its dominance over wealthy clients UBS and Credit Suisse. Silvergate Bank, which defined itself as a leading financial technology and cryptocurrency bank, was the one that truly started this trend after closing on March 8 due to a liquidity crisis. Shortly after, Silicon Valley Bank (SVB) faced a massive flight of deposits after some of its investments collapsed. Eventually, California state regulators shut it down.
These are really extreme measures I don’t know what
The FDIC’s quick response to support depositors surprised Brett. But it seemed even more surprising that the closure of a bank. Occurred on a Sunday, as happened with Signature Bank . He states that it is usually on Fridays. they know, but if there is any significant. Risk in the banking system, it could seriously harm our economy for years to come,” he says. At the center of this entire debacle is the issue of fractional reserves. This system consists of the Saudi Arabia Mobile Number Database bank having only a fraction of the deposits in liquidity, being able to invest the rest in other assets. What is questioned and is very important for cryptocurrencies is whether this system used by many banks also works for technological investors in volatile growth sectors. Ultimately, the question is whether this is the best system for a volatile sector like cryptocurrencies.
One thing that has become clear in recent weeks is that banking
It is a good question to ask again in light of the 3 US bank. Failures according to Todd Baker, senior researcher. At the Richman Center for Business, Law and Public Policy at Columbia Business School. Some experts Business Insider spoke to maintain that the answer is no: the current system is not perfectly suited to cryptocurrencies , and there is currently no suitable replacement in sight. The era of digital banking panics crises are different these Lithuania phone number list days, especially for smaller banks serving specialized sectors. “Massive withdrawals are becoming a different and much more dangerous phenomenon because they happen more quickly. People’s increasing digital and social media connections actually fuel them,” Baker says. The expert remembers massive deposit leaks as a slower process. He was executive vice president of strategy and corporate development at Washington Mutual (WAMU) until its bankruptcy in 2008.