Recent reports reveal that the banking crisis in the United States is deepening. Nearly half of America’s 4,800 banks are currently “burning through their capital buffers,” with many of them potentially insolvent, according to banking expert Professor Amit Seru from Stanford University.
Professor Seru’s report highlights that over 2,315 banks are holding assets worth less than their liabilities, including some of America’s largest banks. A “globally systemic entity with assets of over $1 trillion” is among those at risk.
The Federal Reserve’s monetary tightening is yet to fully impact the economy, with a massive wall of debt accumulating. Some experts estimate the total figure of US debt to be a staggering $31.7 trillion.
The report notes that crashes in the US commercial real estate and bond market have collided with $9 trillion in uninsured deposits in the American banking system.
Stocks in American banks are also plummeting this week, following the seizure of First Republic Bank by federal regulators.