Home Business US banks lose 78 billion dollars in a week, next crisis coming?

US banks lose 78 billion dollars in a week, next crisis coming?

US banks lose 78 billion dollars in a week, next crisis coming?

US banks are currently seeing another large increase in deposit flights. According to a new update of the Federal Reserve Economic Data (FRED) system, a total of $78 billion flew out of US bank accounts from July 5 to 12. That exodus of capital followed a two-week period of relative stability in the system.

Banks are feeling the pressure

It seems that US banks are starting to feel the pressure of higher interest rates, as they too are offering increasingly higher interest rates. JPMorgan Chase CEO Jamie Dimon even warns the bank’s shareholders of the need to offer higher interest rates to prevent further capital outflows.

This of course means that banks will make less profit. Autonomous Research analyst Brian Foran says Dimon’s warning marks a clear “adjust your expectations” moment for banks after industry-wide second-quarter earnings were huge.

US banks are also currently preparing for a massive downturn in commercial real estate. More and more people work remotely or in a hybrid work environment, which means that fewer office buildings are needed.

Too much exposure

From one recent report of S&P Global Market Intelligence found that 576 US banks have too much exposure to commercial real estate. Compared to one year ago, that exposure has even increased by 30 percent.

In that respect, this appears to be a potential recipe for a new episode in the US banking crisis. The previous chapter in this soap has certainly not been a negative experience for Bitcoin.

Many people see Bitcoin as an alternative station to park their money, which is potentially a lot safer than the traditional banking system.

After all, you don’t have to trust anyone within Bitcoin and the digital currency has also generated a decent return over the past 14 years. More and more people are starting to recognize the value of Bitcoin in that regard.

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