Foreword: The U.S. banking industry is once again in a thunderstorm crisis, and financial markets are in turmoil again. The Fed's insistence on not cutting interest rates has raised fears of a financial crisis. A friend who works on Wall Street revealed Americans' unique financial perceptions and deciphered the truth of the current situation. This article will take this as the main line to delve into the background, impact and possible development trends of the US banking crisis.
The renewed crisis in the U.S. banking sector has caused unease in financial markets. The latest round of thunderstorms originated in the commercial real estate sector, not the usual junk bonds of the past. In 2023, banks such as Silicon Valley Bank in the United States will go bankrupt one after another, triggering a run on the market. Now, New York Community Bank is also in trouble with a credit downgrade. This series of crises has raised concerns about the future of the U.S. banking sector.
The bankruptcy crisis of the community bank in New York has caused panic in the market. Moody's downgraded its credit rating to "junk," which means it is at serious risk. The impact of this incident is not limited to New York community banks, but also to the entire U.S. banking industry. Affected by this, the stock prices of banks in other regions have also been **, and the run wave has swept the United States again.
The intensification of the banking crisis in the United States will have far-reaching consequences for the entire financial system. According to Moody's, as many as 186 banks across the country are on the verge of bankruptcy, a staggering number. What is particularly worrying is that, unlike last year, this thunderstorm is mainly aimed at the commercial real estate sector, which is larger in scale and has a more far-reaching impact on the entire market.
The U.S. banking sector has seen a staggering number of losses, especially in commercial real estate loans, which are as high as 29 trillion dollars. Combined with the size of the bond holdings, the potential risk for the entire banking sector is more than $7 trillion. Under these circumstances, even if the Fed has introduced special financial instruments such as the Bank Term Financing Program to mitigate the crisis, it is still unclear whether it will be able to effectively defuse the financial crisis in the face of risks of this magnitude.
Americans have a unique vision of financial crises. Some believe that the financial crisis is the inevitable result of the bursting of the market bubble, and the US dollar interest rate hike is the squeeze of the bubble, leading to the elimination of "bad banks" and "bad assets", which is the process of self-purification of the financial industry. Therefore, they do not see the current crisis as a financial crisis in the true sense of the word, but more like a market adjustment and reshuffle.
However, even so, the challenges facing the U.S. banking sector remain daunting. The commercial real estate crash could put more banks in trouble and the stability of the entire financial system at risk. Although the Fed has taken a series of measures to stabilize the market, whether it can withstand the impact of a full-blown thunderstorm is still a serious question in front of people.
Summary: The U.S. banking industry is once again in a thunderstorm crisis, and the risks and pressures behind it cannot be ignored. While the Fed's actions have had some effect, the overall financial system remains fragile. Financial crises do not occur overnight, but are the result of long-term accumulation and a causal cycle. In the challenges ahead, only by being more prudent and sober about financial risks can we better resist risks and maintain the stability and sustainable development of the financial market.