What the bank crisis is all about
I explain many issues which are not covered by media, especially our local state mouthpiece.
The common knowledge now is banks hold securities. Interest rates have gone up, so those long term securities create huge unrealised losses in banks. That is true. This works out to about US$600b as at Dec 2022 for all commercial banks guaranteed by FDIC.
But what people do not understand is that banks manage their interest rate gaps and would have hedged their asset-liability mismatch. That means unrealised securities losses do not translate to losses at the bottom line because it is compensated by hedged income.
MAS has said there is no risk for Singapore Banks. This is wrong. The regional banks are getting hit. But if an international bank collapses, Singapore banks may and probably get hit. The problem will be counter party exposures. Shit hit the fan when it comes to money market and derivatives.
So panicking investors elevate what is essentially a liquidity problem into a solvency problem in the case of SVB, and maybe others.
Patrick Low
* Article first appeared on Down The Rabbit Hole.
This is GREED-DRIVEN crisis.
You reap what you sow.
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I smell desperation. Is the writer holding US bank shares?
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Dear Patick,
So will you buy more US debts to show your support of your Americunt Ma$ter
against Ru$$ia who dump fuel on US drone and down it ?
挑起美俄對抗的”意外”? 賴岳謙推測美無人機墜海原因 @CtiNews
https://www.youtube.com/watch?v=C91sES7S52A
See moment Russian fighter jet confronts US drone
https://www.youtube.com/watch?v=ryhSbc_oeCU
Singaporeans like Patrick must turn up in front of Russia Embassy to protest against Russia for polluting the air with flammable fuel.
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Never before has a creature of such calibre be led into the White House, to bring chaos and disorder to the nation.
https://youtu.be/c-ULisCUNR4
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