Credit Suisse, Silicon Valley Bank, First Republic Bank – banks are reeling again and need to be rescued. How dangerous is the situation? What’s next? In an interview with “René wants yield”, stock market expert Dirk Müller classifies the situation.
Important points in the video:
- 00:00 Is the financial crisis returning?
- 03:53 Was the crisis foreseeable?
- 04:49 LBO – the new threat to the financial system
- 13:56 Pay attention to these warning signs
- 16:10 Are the central banks now collapsing in the fight against inflation?
- 17:40 Where is the money safe now?
- 22:47 Dirk Müller is now pursuing this strategy
What began with the bankruptcy of a regional bank in the USA has escalated into a veritable banking crisis. According to a report by the Bloomberg news agency, the Association of Medium-sized US Banks (MBCA) has asked the supervisory authorities for help to prevent a customer run on the financial institutions. The institutes have asked the US deposit insurance fund FDIC for insurance for all customer deposits for the next two years, reports Bloomberg. The agency writes, citing a letter from the group to the FDIC, that this would immediately prevent the withdrawal of customer funds from the smaller banks. In Europe, on the other hand, the Swiss bank Credit Suisse is in trouble. The Swiss National Bank has already had to support them.
Stock market expert Müller is worried
For stock market expert Dirk Müller, the problems are no surprise. “We have a financial system that is just very unstable. It needs cheap central bank money to make it work.” Müller does not have the impression that the system has become more stable after the financial crisis – contrary to what was announced. There would still be many dangers lurking beneath the surface. One danger is loans for takeovers, which banks have given generously to companies in times of cheap money.
Tense situation in the banking sector
How tense the situation in the US banking sector was recently was shown on Thursday by data from the central bank. In the seven days ended March 15, the Fed issued a record $152.85 billion to financial institutions through its emergency liquidity program, dubbed the discount window. This surpassed the previous high of $111 billion from the 2008 financial crisis. For comparison, the previous week, the banks had claimed just $4.58 billion from the discount window. An additional $11.9 billion flowed from the Bank Term Funding Program, set up by the Fed on Sunday, where banks anonymously receive loans on particularly favorable terms.
The US government has been trying for days to ease the situation – so far there has been limited success. After the collapse of the start-up financier Silicon Valley Bank – the biggest collapse of a US money house since the financial crisis of 2008 – the US government tried to calm the nerves of bank customers in the country with a far-reaching deposit guarantee over the weekend. At a congressional hearing in Washington on Thursday, Treasury Secretary Janet Yellen reiterated that the banking system remains stable and secure and there is no need to worry about deposits. “The government has taken decisive and vigorous action,” Yellen said.
