More bank failures raise concerns

Treasury Secretary Janet Yellen said the government will remain vigilant and take additional steps as needed to support the banking system....(read more)

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As the global economy continues to suffer the consequences of the COVID-19 pandemic, concerns are growing over the potential for more bank failures in the near future. Economists and financial experts are warning that the ongoing economic disruption could push some of the world's most vulnerable banks over the edge, risking a new wave of bank failures that could further amplify the economic shockwaves already being felt. Many countries have already experienced significant banking disruptions due to the pandemic. For example, in the United States, the Federal Deposit Insurance Corporation (FDIC) closed 5 banks in 2020, up from just one in 2019. Furthermore, the World Bank recently predicted that the Covid-19 pandemic could cause a collapse in the global financial system, potentially leading to a significant increase in the number of banks at risk of failure. There are a few key factors that are contributing to the growing concerns over bank failures. One is the continued uncertainty in the global economy. With the pandemic still raging in many parts of the world, it remains unclear when, or if, a return to normalcy can truly be achieved. This uncertainty makes it difficult for banks to accurately assess their risk, which can put them in a precarious position. Another factor is the ongoing low interest rates. Lower rates can make it more difficult for banks to generate profits, which can put undue pressure on their balance sheets. Banks also rely on interest rates to lend money to customers, which can generate significant revenue. However, with rates so low, banks may struggle to generate enough income to keep up with their obligations. Finally, there is the issue of non-performing loans (NPLs), which are loans that are not being repaid on time or at all. NPLs can be a major burden for banks, as they can lead to significant losses that can erode their capital base. During the pandemic, there has been an increase in personal and corporate bankruptcies, which can contribute to a rise in NPLs for banks. To address these concerns, many governments are putting in place measures to support their local banking sectors. For example, the US Federal Reserve has introduced a number of programs to help banks weather the storm, including asset purchases and lending programs. The European Central Bank has also introduced various measures, such as a lending program for banks to support small and medium-sized businesses. The bottom line is that the risk of bank failures is a real concern in the current economic environment. While there are no guarantees, governments and central banks are doing what they can to support the banking sector and mitigate the potential damage. However, it is clear that the economic disruption caused by the pandemic has put banks in a precarious position, and we may yet see more bank failures before the crisis is over. https://inflationprotection.org/more-bank-failures-raise-concerns/?feed_id=81754&_unique_id=642117d33d6e0 #Inflation #Retirement #GoldIRA #Wealth #Investing #abc #Banking #failures #government #Janet #money #news #p_cmsid2494279 #p_vidnews98022764 #Secretary #support #system #Treasury #Yellen #InvestDuringInflation #abc #Banking #failures #government #Janet #money #news #p_cmsid2494279 #p_vidnews98022764 #Secretary #support #system #Treasury #Yellen