"Protecting Your Finances During Uncertain Times: Lessons from Bank Failures"
The recent collapse of SVB highlights the systemic risks in the US banking system, particularly the maturity mismatch between assets and liabilities at major banks. Other risks include the poor quality of corporate loans, rising delinquencies in unsecured lending, and the unreliability of the Liquidity Coverage Ratio (LCR) in a crisis situation. Large US banks with significant exposure to unsecured retail lending could become insolvent if the sector deteriorates further. The quality of corporate credit portfolios also raises questions, and the recent Credit Suisse drama highlights the risks posed by tens of trillions of dollars in derivatives on the balance and off-balance sheets of US banks.