9/10/2023 0 Comments End notesIn contrast, a decision by Trump-era politicians to repeal key regulation for small banks in 2018 is being blamed, in part, for the latest rout. Authorities have made some concession to boost growth and competition, but stopped short of loosening capital rules – a decision which is proving to have been sound, given recent turmoil. It is a level of competition that UK regulators have been striving to stimulate for years, particularly in the wake of the financial crisis, when state bailouts and emergency takeovers gave further advantage to RBS and Lloyds Banking Group. But unlike in the UK, smaller, regional banks play a much larger role in the American economy, accounting for nearly half of consumer and business lending. First Republic, for example, held roughly $174bn-worth of deposits the day before SVB failed, but went on to lose about $100bn in the weeks that followed.Īmong the hardest hit were Dallas-headquartered Comerica, Zions Bancorporation, Trust Financial and Ke圜orp – none of them household names. With fewer deposits, banks are at risk of a liquidity crunch, since they could run out of quick cash to repay customers demanding funds.
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