Tariq Al-Rifai, head of the Corum Center for Strategic Studies, said that the rapid intervention of US regulators is evidence of the importance of the banking sector to the US economy.
Al-Rifai explained, in an interview with Al-Arabiya, that the financial markets are optimistic about the statements of the Federal Bank and US President Joe Biden regarding this crisis.
He added that it is not possible to calculate the impact of the bankruptcy crisis of US banks on the banking sector and the economy as a whole.
And he continued, “During the global financial crisis in 2008, it began with the collapse of Lehman Bank, and this is a mistake…but the crisis began in March 2008 with the collapse of (Bear Stearns) Bank, then the regulatory bodies intervened to calm the markets, then the risks returned and the collapse in September of Lehman Bank.”
He pointed out that this scenario is unlikely to recur, but the risks still exist, and the question at the present time is: “Will the current policies solve the problem or not?”
Panic is growing in the stock markets, amid strong fears of continued bank collapses, after the bankruptcy of two US banks.
It comes despite regulators’ extraordinary actions on Sunday night to support all depositors of the collapsed SVB and Signature banks, and to provide additional funding to other troubled institutions.
