American banking crisis intensifies market panic Wall Street people: The situation is grim and supervision is dereliction of duty.
China Daily Online, May 6 (Xinhua) Foreign media reported that recently, with the fermentation of American banking crisis, panic is intensifying in the American financial circle represented by Wall Street. Many people in the industry pointed out that the current market situation is not good, and the crisis may spread again, but the regulatory system has not paid enough attention to it.
"Starting with the collapse of the Silicon Valley Bank, although the government intervened to provide protection for depositors and provided loans to major banks, fear has taken root and continued to breed on Wall Street." CNN reported that.
"We feel a strong sense of worry and feel that something is about to happen." The report quoted Ed Moya, a senior market analyst at Anda, as saying, "Infectious panic has never dissipated."
This is a First Total Bank photographed in new york, USA on May 1st. (Xinhua News Agency, photo by Guo Ke)
Recently, the First Total Bank of the United States declared bankruptcy, becoming the third bank in the United States to close this year. Investors are beginning to worry, who will be next? Many people have focused their eyes on a regional bank in California — — Western Pacific Union Bank. On Thursday, the bank’s share price was close to "halved", and the bank has also said that it is currently exploring "strategic options".
Not only the Western Pacific Union Bank, but also the share price of lines West Bank in the United States once plunged after the Financial Times broke the news that it was seeking to sell. The Arizona-based bank subsequently denied the report, making its share price "recover lost ground", but its market value has dropped by 65% this year.
In addition, regional banks located in the southeast — — First Horizon Bank is also "teetering", and its $13 billion M&A agreement with Dominion Bank of Canada has been terminated.
In the face of concerns, Western Pacific Union Bank said that the bank’s current liquidity is abundant, the available liquidity is still stable, and it exceeds uninsured deposits, accounting for 188%. However, this data does not seem to completely dispel the market’s doubts.
"Usually, these data can dispel investors’ fears, but now it is ‘ Extraordinary period ’ 。” Edmoya said, "Even if the data doesn’t look so bad, as long as the market is eyeing you, the game is over."
The pessimism of the market has also been verified by the statements of some well-known investors. On Thursday, Bill Ackerman, a well-known American investor and billionaire, stated on the social media platform that the current regional banks in the United States have generally fallen into crisis.
Ackerman criticized the American banking supervision system. He also said: "It takes decades to build confidence in financial institutions, but it only takes a few days to completely destroy this trust. With the fall of dominoes, the next fragile bank started again ‘ Teetering ’ 。”
With the collapse of many banks, the financial hegemony of the dollar system is disintegrating. (Source: China Daily Roger English China Journal, March 24, 2023, 8th edition)
Ackerman and others are calling on the US government to further intervene and raise the upper limit of deposit insurance in the United States. At present, the maximum insured amount of most deposit accounts of the Federal Deposit Insurance Corporation of the United States is $250,000. For many companies that are struggling, this amount can only be regarded as a drop in the bucket. But even so, raising the deposit ceiling requires bipartisan support in the US Congress, and "for rational market participants, no one will count on this".
Ackerman is not the only one who criticizes American regulators. Mohammed El-Elian, chief economic adviser of Allianz, also said that the Fed should solve the problem of banking turmoil. He said that the risk of more bank failures has not been eliminated. The big banks in the United States will not be among the first-round shocks, and the problems will all focus on smaller and regional banks.
David Rosenberg, a famous economist, also criticized the Fed’s attitude towards the banking crisis. He believes that in the face of the continuous fermentation of the banking crisis, Fed officials have not paid enough attention to it.
"We are likely to default on our debts at the moment, and the banking crisis is spreading. Sorry Jamie (referring to Federal Reserve Chairman Jerome Powell), the crisis is not over. Focusing on inflation, these people can’t hear clearly. " Rosenberg said.