All articles tagged with #bank collapses
Investment firm KBW predicts a "new world order" for the banking industry following the recent collapses of First Republic Bank, Silicon Valley Bank, and Signature Bank. While individually they were not significant enough to cause major disruption, their collective failure is helping to reshape the industry.
US bank lending contracted by the most on record in the last two weeks of March, indicating a tightening of credit conditions in the wake of several high-profile bank collapses that risks damaging the economy. Commercial bank lending dropped nearly $105 billion in the two weeks ended March 29, the most in Federal Reserve data back to 1973. The recent bank failures have complicated the central bank’s efforts to reduce inflation without sending the economy into a recession.
The gold market saw renewed gains as U.S. bank regulators faced tough questions about what led to the unexpected collapse of Silicon Valley Bank and Signature Bank. The bank failures triggered a broader market selloff and a shift in Federal Reserve rate expectations, which reversed from more rate hikes to rate cuts. Despite some profit-taking at the start of the week, the gold market is taking the news well, rising more than $20 on the day, with June Comex gold futures last trading at $1,993.30 an ounce.
The collapses of traditional banks have led to increased interest in self-custody solutions for digital assets, with VC firms investing in startups focused on decentralized finance and infrastructure. This shift toward self-custody wallets and DeFi systems is indicative of a larger trend that sees more people embracing cryptocurrencies and financial sovereignty. By embracing these emerging technologies, VC firms and startups are creating a more resilient and inclusive financial system for all.
Bitcoin has surged 50% this year, outperforming major stock indexes and commodities, despite the collapse of major crypto-focused banks. The recent rise is attributed to the failures of traditional banks, which have highlighted the power of decentralized currencies. Bitcoin is seen as a way for investors to protect themselves against central bank moves and is viewed as a store of value due to its finite supply. The stress on the financial sector could slow down the pace of rate hikes from the Fed, which could help risk assets, such as stocks and bitcoin.