Ahead of the Herd | Sept 13, 2023
It was exactly six months ago when the US regional banking crisis started to dominate news headlines, triggering concerns over the global financial system. Fast forward to today, the panic has mostly subsided, thanks in large to the financial might of the Federal Reserve, which acts as a lender of last resort to the banks.
Still, the sequence of events left us with a lot of unanswered questions. After all, emergency funds from the Fed can only paper over the cracks of the US banking system; the main forces behind the bank failures earlier this year — four to be precise — are still present, namely high interest rates. Three of those were amongst the four biggest banking failures in US history (see below).
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