2023 has been a rollercoaster ride for the U.S. banking industry. The collapse of three major banks has sent shockwaves through the financial world, with their combined assets surpassing the top 25 banks that crumbled in 2008. The following is a closer look at what has triggered a ‘great consolidation’ in the banking sector, a recurring theme in the industry’s history over the past century.
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A Listicle of Bank Consolidation, Failures, and Issues Facing the U.S. Banking Sector
Los Estados Unidos. banking industry has taken a beating in 2023, with the market capitalizations of dozens of banks across the country dropping considerably in recent months. The reasons for this struggle are varied, with some blaming poor choices by financial institutions and others pointing fingers at the U.S. Banco Central. While it’s important to consider different opinions, a comprehensive listicle of information can shed light on the country’s ‘great consolidation’ in the banking sector and the largest bank failures in the United States. Asi que, let’s take a closer look at these developments and what they mean for the country’s banking industry.
- In the year 1920, historical data reveals that the United States boasted a grand total of approximately 31,000 bancos. Sin embargo, by the year 1929, this number had dwindled down to less than 26,000. Since that time, the number of banks has experienced a precipitous decline, plummeting by a staggering 84%. Como resultado, fewer than 4,160 bancos remain in operation today.
- Out of the 4,150 A NOSOTROS. bancos, the top ten hold más que 54% of FDIC-insured deposits. The four largest banks in the country have amassed a whopping $211.5 mil millones in unrealized losses, with Bank of America bearing the brunt of a third of that amount.
- The Federal Deposit Insurance Corporation (FDIC) provided JPMorgan Chase a $50 billion credit line and noted it lost $13 billion from the First Republic Bank fallout. The FDIC estimated the cost of Signature Bank’s failure to its Deposit Insurance Fund to be around $2.5 billion and the Silicon Valley Bank collapse cost the FDIC $20 mil millones, bringing the total to $35.5 mil millones.
- In addition to the recent First Republic Bank collapse, Pacwest Bancorp’s shares have been sinking steeply. Over the past six months, Pacwest has lost 73% of its market capitalization value. Ahora, Pacwest is weighing strategic options and a possible sale, according to people familiar with the matter.
- Western Alliance Bancorp is also struggling with shares abajo 57% lower during the last six months. While several of the failed banks saw significant withdrawals like First Republic’s $100 billion outflow in March, Western Alliance reclamos it has not seen any unusual deposit outflows.
- Sources y Estadísticas show that U.S. banks that provide mortgages lost an average of $301 for every loan that originated in 2022, abajo 87.13% from the $2,339 profit per loan in 2021.
- In the second quarter of 2021, banks acquired a record amount of government debt by obtaining $150 mil millones worth of 10-year Treasury notes. Sin embargo, thanks to the Fed’s ten consecutive rate hikes, 10-year and 2-year treasury bonds in the U.S. are currently inverted. This means the banks with excessive reliance on long term bonds are struggling because the yields on the 2-year Treasury note are actually higher than the 10-year Treasury.
- En mayo 3, 2023, los Estados Unidos. Reserva Federal raised the benchmark bank rate and it is now at a 16-year high.
- In March, the four biggest U.S. banks by assets held, JPMorgan Chase, Banco de America, Citigroup, and Wells Fargo collectively lost $52 billion of market value.
What do you think about the issues U.S. banks face in 2023? Comparta sus pensamientos sobre este tema en la sección de comentarios a continuación..
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