The US banking system gave lost its power

Former Assistant Secretary of the Treasury in the Ronald Reagan administration, Paul Craig Roberts, said that the US banking system is not safe, contrary to the words of President Joe Biden.

ㅤㅤ

“The banking system is not safe because the five largest US banks bear the risk of losing twice the world’s GDP,” the politician said.

ㅤ

He believes that American credit institutions will have to get rid of assets on the balance sheet, which will lead to further depreciation of securities.

ㅤ

“The Fed will have to abandon its high interest rate policy as it undermines financial sector balance sheets, leading to a wider spectrum of collapse,” Roberts said.

ㅤ

On Saturday afternoon, the Federal Deposit Insurance Corporation (FDIC) reported that regulators in the state of California have closed Silicon Valley Bank, the largest bank to collapse in the US since the last financial crisis. The FDIC transferred all insured deposits from the SVB to a separate entity it created, the Deposit Insurance National Bank of Santa Clara.