Economist Peter St Onge argues that although the Federal Reserve has claimed that the US banking system is sound and resilient, the banking crisis of this day has much exceeded the one in 2008 in terms of assets which had been wiped out. He believes that the collapse of several banks is just the start of a much more serious trouble, yet to come. Going by the precedent set in 2008, St Onge predicts the situation to become more threatening within the next 12 months as it will take at least that long for the effects of the Federal Reserve’s influential interest rate decisions to make an impact on the economy. The increase in the rate of interest is especially concerning given that around 25 US banks had already entered an insolvency process back in 2008. This was followed by 440 more in the succeeding 4 years, counting up to an average 110 banks per year, compared to 2 in the period before the crisis. Such sobering figures portray the larger picture and the dire implications it may have. With the predictions in mind, it is essential for investors to brace for more collapses, as the real storm has yet to hit.
Julia Nelson
- 2023-05-08
US Banking Crisis exceeds 2008 – What’s Next?
Economist Peter St Onge argues that the current US banking crisis has surpassed the crisis in 2008, with the Federal Reserve’s influential rate decisions deepening the pitfall. What does he suggest should be expected in the coming 12 months?
