Subscribe
    Business

    Banking Crisis: 560 banks have drowned in America in 23 years, then why is there an uproar this time?

    Shehnaz AliBy Updated:No Comments3 Mins Read
    New Delhi: The banking crisis that started from America has now reached the threshold of Europe. Shares of Swiss giant Bank Credit Suisse fell heavily on Thursday. Its visible on banking stocks all over the world. There is panic among investors. Investors in America are taking money out of small banks and keeping it in big banks. The record keeping of bankrupt banks in America started from the year 2001. Since then 560 banks have drowned. In the year 2009, 140 banks and in the year 2010 maximum 157 banks were drowned in the country. Prior to that, in the year 2008, 25 banks had failed. It was the largest banking crisis in modern US history. This time only two banks have sunk and still why is there so much ruckus?

    The reason for this is that in terms of assets in the US, this is the biggest banking crisis since 2008. The combined assets of the 25 banks that failed in 2008 were $374 billion. This time the combined asset of Silicon Valley Bank and Signature Bank is $319 billion. A bank has reached the verge of collapse. First Republic Bank is also facing the threat of bankruptcy. Last year US banks lost $620 billion. The way the US Fed Reserve is raising interest rates to control inflation, many more banks are at risk of drowning.

    SVB Crisis: Outcry in the stock markets around the world, will Tim Mayopoulos be able to do a miracle!

    what will happen if banks fail

    Since 2001, 560 small and big banks have failed in America. Four banks failed in 2001, 10 in 2002, three each in 2003 and 2004. After this, three banks failed in 2007 and 25 in 2008. In 2008, Washington Mutual had sunk, whose assets were $ 307 billion. Apart from this, Indymac with an asset of $ 32 billion was also drowned. 140 banks failed in 2009, 157 in 2010, 92 in 2011, 51 in 2012 and 24 in 2013. After this, in 2014, 17 banks were submerged. Since then every year the number of banks that failed has been in single digit. But this time the collapse of Silicon Valley Bank and Signature Bank has stirred up depositors. People are withdrawing money from small banks and depositing it in big banks. Experts say that due to less deposits in banks, they will give less loans. This will stop the flow of capital in the economy and increase the risk of recession. Its effect can be seen on the whole world including India.

    Source: navbharattimes.indiatimes.com

    : Language Inputs

    This post is sourced from newspapers, magazines and third-party websites. For more information please check NewsDay Express Disclaimer.

    Shehnaz is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing about Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.

    Related Posts

    Comments are closed.