One of the biggest banking falls of the last decade in the United States was registered after the collapse of Silicon Valley Bank a few days ago. Experts say that other banks could fail soon.
This undoubtedly caused a crisis in the sector, and unleashed the concern of millions of consumers who are torn between these two options.
Protect money from bankruptcy
Store your money in a financial institution, or keep it in your homes. The truth is that if the probability of an economic recession had been predicted before, with such a banking crisis, now the country is getting closer.
The odds of a recession in the United States have increased considerably given the current economic impact of the banking situation.
Panorama that is also accentuated by the part that involves small lenders. This is confirmed by data from Goldman Sachs, one of the largest investment banking and securities groups in the world.
Goldman Sachs states that there is a 35% probability that the US economy will enter an economic recession by 2024. This undoubtedly reflects greater uncertainty related to the economic effects of this banking crisis.
What is the context of said bankruptcy situation?
First the news of the bankruptcy of Silicon Valley Bank was released and two days later the same thing happened with Signature Bank. Therefore, the panorama of recent times has not been encouraging at all.
On the other hand, Goldman Sachs forecast the US Gross Domestic Product to fall by 1.2% for the fourth quarter of 2023. If this were to happen, it would influence the current situation of small and medium-sized lenders, mediated by the events of Silicon Valley Bank and Signature Bank.
Which banks are most at risk of bankruptcy then
The bank’s analysts, led by Manuel Abecasis, said that any credit impact is likely to be concentrated in a subset of small and medium-sized banks.
As if that were not enough, bond yields have been declining, and oil and stock prices have fallen. Market volatility has also increased notably, making fear of economic recession increasingly palpable.
