'If uninsured deposit withdrawals cause even small fire sales, substantially more banks are at risk.'
Around 200 American banking institutions are susceptible to suffering the same fate as Silicon Valley Bank last week, according to a new study.
Without additional government involvement or recapitalization, "our calculations suggest these banks are certainly at a potential risk of a run," according to the analysis.Although the US government protects bank deposits up to $250,000, the report asserts that these at-risk banks have a significant proportion of uninsured depositors who are more likely to withdraw their money out of fear of losing it.
"If uninsured deposit withdrawals cause even small fire sales, substantially more banks are at risk."are made up primarily of mortgage-backed securities and government bonds, both of which have been adversely impacted by recent interest rate increases by the Federal Reserve.to close its doors and take deposits last week, marking the second-largest banking collapse in American history and the biggest since the 2008 financial crisis.
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