US Treasury Secretary Janet Yellen, despite rumors of an impending recession, continues to believe that her country’s economy will grow, inflation will decline, and the labor market will remain stable. She told AFP regarding this.
“Our banking system is reliable and stable. The measures we have taken are aimed at strengthening this and ensuring broad public confidence,” added Ms. Yellen.
The Minister stressed that she is ready to ensure the safety of all deposits and monitor the state of the banking system. Officials will use all available tools as needed for financial institutions of any size to keep the system safe and sound.
Earlier this week, JP Morgan Chase CEO Jamie Dimon told the agency that the current banking crisis is not yet over and its effects will be felt for several more years. At the same time, he noted that the current state of affairs is not at all like the financial crisis of 2008, but added that it is not clear to him when the current problems will end.
On March 10, the 16th largest US bank, Sillicon Valley Bank (SVB), filed for bankruptcy. On March 27, it was announced that First Citizens, a banking holding in North Carolina, would acquire all deposits and loans from Silicon Valley Bridge Bank, an SVB sanatorium, for regarding $72 billion at a $16.5 billion discount.
A few days following the bankruptcy of SVB, the same thing happened to New York’s Signature Bank. At the end of March, it became known that a significant part of Signature Bank’s assets would be acquired by New York Community Bank. However, a significant part of the assets of both banks remains under the control of the FDIC.
On March 19, the Swiss National Bank announced an emergency merger of the country’s two largest banks, UBS and Credit Suisse. The reason was long-term corporate scandals and financial problems of Credit Suisse, which ended 2022 with a loss of $ 7.9 billion – this is the bank’s worst result since 2008.
The March problems of banks in the US and Switzerland for the first time caused a noticeable wave of preprints written by economists “on the topic of the day.” The bankruptcies of SVB and Credit Suisse have already been analyzed in dozens of academic texts written in one or two weeks, with the usual timeframe for such publications being at least a few months.
Read more in the material “At least three volumes per month.”