International Monetary Fund (IMF), the big USA He said the bankruptcies of its banks could be the beginning of more serious financial stability problems.
“The recent collapse of major international non-operating banks, which so far has had only a modest impact on credit conditions, could potentially be the start of more serious and deeply rooted systemic financial stability problems,” the IMF said in a statement.
According to the IMF, the US Federal Reserve’s maintenance of high interest rates could pose greater challenges for the US banking system and non-bank institutions.
“Unrealized losses from investments in long-term securities will make the cost of new financing for households and companies unmanageable for banks and non-banks,” the statement said.
“IF INTEREST RATES KEEP HIGH FOR A LONG TIME, THE POSSIBILITY OF CRISIS INCREASE”
The IMF noted that tighter fiscal conditions would cause an increase in bankruptcies, a deterioration in the quality of loan portfolios and increased stress for highly leveraged institutions.
“The longer the interest rates stay high, the greater the probability of a crisis,” the statement said.
“IT WILL CREATE NEGATIVE RESULTS”
A possible downturn in business activity in the US, which risks turning into a recession, could have serious implications for the rest of the world, with the US currency and high Federal Reserve (FED) interest rates, the IMF said.
“The combination of higher US interest rates, a stronger dollar and a sharp decline in activity will have significant negative macro-financial consequences for the rest of the world,” the statement said.
BANKRUPTCY OF US BANKS
Tensions in the US banking sector were confirmed in March by California state regulators as one of the 20 largest commercial banks in the US. Silicon Valley BankIt had climbed after closing it.
The collapse of the SVB led to the depreciation of assets on the balance sheets of many financial institutions. FEDwas associated with an increase in the underlying interest rate.
It was also announced that Silvergate, a crypto-focused bank, closed on March 8, and Signature Bank, a similar New York-based bank, closed on March 12.