The failure of Silicon Valley Bank has thrown the US banking system into turmoil, drawing comparisons to the global financial crisis. The UBS economists do not see current bank failures and government measures as harbingers of a systemic crisis.
The US banking system is better capitalized than it was before the 2008 global financial crisis
“While we are closely following developments, we do not view the current bank failures and government actions as harbingers of a systemic crisis.”
“The US banking system is better capitalized than it was before the 2008 global financial crisis: The industry’s risk-based Tier 1 capital ratio stood at 10.11% at the end of 2007, up from 13.65% at the end of 2022 .”
“Silicon Valley Bank was somewhat unique. It had high exposure to venture capital startups experiencing a loss of liquidity, making it vulnerable to deposit outflows. It had the highest ratio of securities to total assets in the industry, making it virtually the only US bank to have near-negative net worth if mark-to-market losses are included.”
“If US regulators let Lehman Brothers fail in 2008, this time they have intervened proactively to compensate depositors.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
