ECONOMIC PERSPECTIVES | Does collapse of key banks in US, Europe portend a return to 2008?
1 year, 8 months ago

ECONOMIC PERSPECTIVES | Does collapse of key banks in US, Europe portend a return to 2008?

The Hindu  

Published : Apr 06, 2023 11:00 IST - 12 MINS READ Developments over the past month have sent jitters through the international banking community. With the US Federal Reserve and other advanced economy central banks having adopted unconventional monetary policies, involving quantitative easing and low or near-zero interest rates, in response to the 2008 crisis, the world was awash with cheap liquidity. The bank rescue involved a liquidity infusion of $70 billion, of which $30 billion came from the 11 largest US banks and $40 billion from a Fed lending facility. Tightening money supply The US Fed and central banks in Europe and elsewhere responded to this by raising interest rates. As ‘safe capital’, Credit Suisse had on its books $17.3 billion of Contingent Convertible Bonds, which had no definite maturity but could take a hit when banks ran into trouble.

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History of this topic

A Soft Landing in the U.S. Could Be Hard for Everyone Else
1 year, 2 months ago

A Soft Landing in the U.S. Could Be Hard for Everyone Else

Live Mint  

The U.S. economy might be heading for a soft landing. Surprising strength in the U.S. economy poses a threat to the rest of the world, portending higher interest rates for longer and a stronger dollar that will weigh on other countries’ growth. Fragmentation Strong U.S. economic data, including September’s blockbuster hiring report, helped send Treasury yields to 16-year highs as …

When Is a Global Economic Meltdown Expected? Five Financial Experts Lay It Down
1 year, 8 months ago

When Is a Global Economic Meltdown Expected? Five Financial Experts Lay It Down

The Quint  

Silicon Valley Bank failure, and the massive contagion it sparked, look like a classic banking run. The response from the US Treasury and the US Federal Reserve—which applied nineteenth-century British economist Walter Bagehot’s principle that, to stem panic, a lender of last resort is needed—also looks quite familiar. First, in 2008, the worry about collapse was so intense that a …

Could Silicon Valley Bank collapse affect European banks? Experts say…
1 year, 9 months ago

Could Silicon Valley Bank collapse affect European banks? Experts say…

Hindustan Times  

The failure of Silicon Valley Bank isn’t a blueprint for similar issues at European lenders, which remain attractive for investors as interest rates rise, according to Deutsche Bank AG and Citigroup Inc. Police officers leave Silicon Valley Bank's headquarters in Santa Clara, California. European banks also mainly hold such assets in cash and government bonds, with securities portfolios typically a …

Europe's banks suffer worst day in 9 months after sharp sell-off in U.S. banks
1 year, 9 months ago

Europe's banks suffer worst day in 9 months after sharp sell-off in U.S. banks

The Hindu  

European bank shares tumbled on March 10 in the wake of a dramatic sell-off in U.S. lenders as concern spread that the sector will be vulnerable to the rising cost of money. Europe's STOXX banking index fell more than 4%, set for its biggest one-day slide since early June, with declines for most major lenders, including HSBC, down 4.5%, and …

Business Highlights: Wall Street dive, worker shortage
2 years, 7 months ago

Business Highlights: Wall Street dive, worker shortage

Associated Press  

___ Stocks slump 3% as worries grow over higher interest rates NEW YORK — Stocks closed sharply lower on Wall Street as worries grow in markets that the higher interest rates the Federal Reserve is using in its fight against inflation will derail the economy. ___ Rising interest rates in US will hinder foreign economies WASHINGTON — When the Federal …

Rising interest rates in US will hinder foreign economies
2 years, 7 months ago

Rising interest rates in US will hinder foreign economies

Associated Press  

WASHINGTON — When the Federal Reserve raises interest rates — as it did Wednesday — the impact doesn’t stop with U.S. homebuyers paying more for mortgages or Main Street business owners facing costlier bank loans. “It will put pressure on all types of developing countries,’’ said Eric LeCompte, executive director of the Jubilee USA Network, a coalition of groups seeking …

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