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cover of episode How the Coming Credit Crunch Could Harm the Economy and Real Estate Prices

How the Coming Credit Crunch Could Harm the Economy and Real Estate Prices

2023/4/12
logo of podcast Money For the Rest of Us

Money For the Rest of Us
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People
A
Anirban Basu
C
Christopher Waller
D
David Stein
Topics
David Stein: 硅谷银行的倒闭是一场典型的银行挤兑事件，96%的存款超过了FDIC的保险限额。当银行陷入困境的消息传出后，存款人在一天内试图提取420亿美元，占银行总存款的24%。为了避免系统性风险，联邦储备委员会和FDIC决定对所有存款人（包括未投保存款人）提供全额保护，但银行股东和某些无担保债权人将不会受到保护。联邦储备委员会还推出了银行期限融资计划（BTFP），允许银行以优质抵押品（如美国国债）为抵押获得贷款，从而避免因出售债券而造成损失。

Deep Dive

Chapters
This chapter analyzes the recent decline in bank deposits, particularly focusing on the outflows from smaller banks following the Silicon Valley Bank collapse. It explores the reasons behind the shift in deposits towards larger, systemically important banks and the impact on bank profitability.
  • 96% of Silicon Valley Bank's deposits were uninsured.
  • Depositors tried to withdraw $42 billion in one day.
  • U.S. commercial bank deposits were $17.2 trillion, $500 billion lower than February 2023.
  • Smaller banks saw a bigger decline in deposits (4.5%) compared to larger banks (1.5%).
  • The shift in deposits is due to the perception that larger banks are systemically important and their deposits are more protected.

Shownotes Transcript

How accelerating bank deposit withdrawals could harm the economy, including real estate prices. How dollars slosh around the financial system but always seem to end up at the Federal Reserve.

Topics covered include:

  • How many deposits have left banks since the Silicon Valley Bank collapse
  • How much have banks borrowed from the Federal Reserve to meet deposit withdrawals
  • Why exiting deposits are harming bank profits and causing them to make fewer loans
  • How the credit crunch could hurt commercial real estate values
  • How money market mutual funds differ from banks
  • How today's banking crisis is similar to the 1980s savings and loans crisis
  • What should investors do to protect their wealth

For more information on this episode click here).

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Show Notes

Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks—The Federal Reserve)

Assets and Liabilities of Commercial Banks in the United States—The Federal Reserve)

All U.S. Banks Net Interest Margin—BankRegData)

Current Treasuries and Swap Rates—Chatham Financial)

Options trading surges as investors brace themselves for US regional bank volatility by Stephen Gandel and Nicholas Megaw and Colby Smith—The Financial Times)

Bank Turmoil Squeezes Borrowers, Raising Fears of a Slowdown by Jeanna Smialek—The New York Times)

Banks' Demand for Reserves in the Face of Liquidity Regulations by Jane Ihrig—Federal Reserve Bank of St. Louis)

Money Market Funds: Investment Holdings Detail—The Federal Reserve)

Deposit Outflows Shine Light on Fed Program That Pays Money-Market Funds by Eric Wallerstein and Nick Timiraos—The Wall Street Journal)

ICI Research Perspective: Trends in the Expenses and Fees of Funds, 2022—Investment Company Institute)

FAQs: Reverse Repurchase Agreement Operations—Federal Reserve Bank of New York)

US Resolution Trust Corporation by Aidan Lawson and Lily Engbith—SSRN)

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