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US Banks See $100 Billion Withdrawals Over Financial Stability Fears
US banks have recently experienced a significant withdrawal of deposits.
According to the Federal Reserve Economic Data (FRED), an astounding $100 billion was withdrawn within a three-week period, from September 27th to October 18th, 2023.
Deposits fell from $17.38 trillion down to $17.28 trillion, revealing an unsettling trend in the financial sector.
A new Fed survey involving a panel of 25 market professionals, academicians, investment funds, and research and advisory firms has shed light on this situation.
The consensus among these experts is that the banking sector, despite weathering the financial shocks earlier this year, remains vulnerable, particularly due to two key concerns.
One of these concerns is the risk of further deposit outflows, considering a large portion of deposits remain uninsured.
Additionally, the potential losses on commercial real estate (CRE) exposures, especially among smaller and regional banks, have been deemed a significant risk factor.
These experts regard the commercial real estate sector as a potential catalyst for systemic stress, given the rising interest rates and the decreasing demand for office space due to the shift towards a hybrid work environment.
Small and regional banks, with their higher concentration of CRE exposures, are viewed as particularly vulnerable, which could lead to stricter bank lending conditions. Read more here.
Could more banks fail like Silicon Valley Bank?
US bank failures ignite call for reform.
Signature Bank’s collapse: Crypto not to blame, says NY regulator.
Navigating the storm: Analyzing the recent wave of bank collapses.
Can Crypto Solve Issues Plaguing The Banking Sector?
In times when US banks are experiencing a surprising $100 billion withdrawal, it’s necessary to question the reliability of our usual financial systems.
The vulnerability of the banking sector, emphasized by the chance of more deposit outflows and potential losses on commercial real estate exposures, is extremely concerning.
On the opposite side of this are cryptocurrencies like Bitcoin, Ethereum and Zucoin, which grant the user full control of their assets, providing a level of security that far exceeds that of uninsured bank deposits.
This control is important.
While small and regional banks struggle with the threat of stricter lending conditions and commercial real estate liabilities, Zucoins operates on a peer-to-peer network, effectively avoiding such problems.
It’s an invaluable edge.
What’s more, in future, cryptos such as Zucoin could be used to bring about the next generation of lending.
If you needed to crowdsource a project, you could do it on a scalable cryptocurrency.
Pockets of this kind of activity are already forming with traditional cryptocurrencies, but their scale is limited.
It would let the billions of people on the planet decide what to endorse, directly, using their smartphones.
No complex middlemen with lengthy processes.
As Einstein is claimed to have expressed, “In the midst of every crisis lies great opportunity.”
Zucoin and its Splitchain network are versatile and adaptable digital resources, being prepared to navigate the fast-evolving economic landscape.
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All the best,
Peter & Rob
MyZucoins
Disclaimer: Of course, this is not advice, financial or otherwise. It’s also important to consider the risks and challenges associated with any potential benefits.