11 Big Banks Unite to Support First Republic Bank and the U.S. Economy
This week, 11 of the nation’s largest banks, including Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley, announced that they are joining forces to funnel $30 billion worth of uninsured deposits into First Republic Bank (FRC).[0] The move is in response to the failed banks Silicon Valley Bank and Signature […]
Continue reading Paul Krugman Debunks Myths About the SVB Collapse and Reassures Investors
The collapse of Silicon Valley Bank has left a cloud of uncertainty in the markets, with many fearing a repeat of the 2008 financial crisis.[0] But according to Nobel economist Paul Krugman, these fears are unfounded and the collapse of the tech-focused bank is unlikely to cause economic doom. The FDIC stepped in to take […]
Continue reading The Collapse of Silicon Valley Bank: Uncovering the Risks of Leveraged Banking
The recent collapse of Silicon Valley Bank (SVB) has shined a spotlight on the risks of leveraged banking.[0] SVB was founded in 1983 and had become one of the most powerful lenders for venture startups, with $209 billion in assets as of December 31, 2022.[1] The bank was heavily invested in mortgage-backed securities, which became […]
Continue reading The Collapse of Silicon Valley Bank and Its Implications
On March 17, 2023, Silicon Valley Bank (SVB) collapsed.[0] The bank, which had assets totaling $209 billion at the end of 2022, according to the Federal Deposit Insurance Corporation (FDIC), was a major lender to venture-backed technology and healthcare companies in the US. Its hyperconnected network of customers meant that a bank run could happen […]
Continue reading The Collapse of Silicon Valley Bank: Implications for Banks, Investors, and Regulators
The recent collapse of Silicon Valley Bank (SVB) has sent shockwaves through the banking sector and rattled investors worldwide. The bank, which had been strategically buying long-term Treasury bonds to make an arbitrage gain of less than 2 percentage points, suddenly found itself in hot water when troubles in the tech sector pushed depositors to […]
Continue reading Stock Market Reeling After Banking Sector Turmoil and ECB Rate Hike
The stock market is still feeling the effects of the banking sector’s recent turmoil. Last week, the 10-year U.S. Treasury yield plummeted to 3.41%, while the two-year Treasury yield dropped to 3.84%, creating a spread of -43 basis points.[0] On Wednesday morning, the Dow Jones Industrial Average dropped more than 1.7%, or more than 500 […]
Continue reading Eurozone Economy Struggles as GDP Growth Revised Down to 0.0% in Q4 2022
The euro-area economy failed to expand in the fourth quarter of 2022, according to the latest data released by Eurostat, the statistical service of the EU.[0] The initial growth reading was revised down to 0% due to weaker-than-expected performances in Germany and Ireland.[1] This marks a slowdown in the economic performance of the euro-area compared […]
Continue reading OECD Lowers South Korea Growth Forecast and Warns of Global Economic Fragility
The Organisation for Economic Cooperation and Development (OECD) has lowered its 2023 growth forecast for South Korea to 1.6 per cent, down from 1.8 per cent in its previous outlook in November.[0] The global economic outlook is still fragile, with the OECD expecting growth to be below trend for the next two years.[1] The OECD […]
Continue reading Credit Suisse Borrows $53.7 Billion from Swiss National Bank; US Banks Launch $30 Billion Rescue of First Republic Bank
Credit Suisse, Switzerland’s second-largest bank, announced on Wednesday that it would borrow up to 50 billion Swiss Francs ($53.7 billion) from the Swiss National Bank in a “decisive action to pre-emptively strengthen its liquidity.”[0] This comes after the bank’s largest shareholder, Saudi National Bank, said it was unable to invest more money due to regulatory […]
Continue reading OECD Revises 2023 Growth Outlook for South Korea amid Global Economic Recovery Fragility
The Organization for Economic Cooperation and Development (OECD) has revised its 2023 growth outlook for South Korea to 1.6 percent, down from 1.8 percent in its previous forecast in November.[0] The OECD further warned that the global economic recovery is still fragile, and downward risks persist due to the prolonged war in Ukraine, the impact […]
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