2024-03-08 20:25:51
Context | Justin Lane | EFE
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The North American regulator has warned that the number of banks in trouble has grown by eight in just the last three months of last year, its largest increase since the disappearance of Silicon Valley Bank.
The number of US banks with economic difficulties ha grew by 18.2% in the fourth quarter alone 2023, following counting 52 entities in trouble, as the Federal Deposit Insurance Corporation (FDIC) has warned in information collected by the ‘Financial Times’.
On the verge of one year of the financial instability unleashed by the collapse of Silicon Valley Bank (SVB) and Signature Bank, the North American regulator has alerted that the number of banks in trouble has grown by eight in the last three months of last year alone, its biggest increase since the disappearance of the SVB.
At the same time, the late payment in the credit card sector and commercial real estate is on the rise and at the highest levels in almost a decade.
“The economic and geopolitical uncertainty, the persistence of inflationary pressures, the volatility in market interest rates and the growing risks in the commercial real estate portfolios of some banks represent a considerable downward risk for the sector,” explained the FDIC Chairman Martin Gruenberg.
US banking sector once more on alert
These tensions coincide with the stabilization of the New York Community Bank (NYCB) following receiving a capital injection of US$1 billion sponsored by former Treasury Secretary under Donald Trump, Steven Mnuchin. In fact, the pre-opening on Wall Street pointed to a rise of more than 5%.
Thus, the New York bank, which has more than US$100 thousand in assets and which doubled its size in just 18 months following acquiring two rival entities, has also announced that will diversify your business beyond housing loans, a highly regulated market in the financial capital of the United States.
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