This compilation of financial-related insights includes videos from John Williams, Tech Revolution, Steven Van Metre, and Lena Petrova.
John Williams discusses debt consolidation, choosing debt settlement or balance transfer in 2023; and reports on banks and lenders bracing for impact as American’s are expected to run out of money in weeks. Tech Revolution shares news of the US debt crisis sparking panic among banks sending shockwaves worldwide. Steven Van Metre says economic horror is imminent as alarming signs point to collapse. Lena Petrova talks about the US Dollar being at risk as Japan, China, and Saudi Arabia accelerate sell off of US treasuries.
Sep 11, 2023
Debt CONsolidation, Debt Settlement or Balance Transfer in 2023?
American’s To Run Out of Money in Weeks | Banks and Lenders Brace For Impact
Sep 11, 2023
In the heart of global financial discussions, a storm is brewing that threatens to reshape the very foundation of the world economy. Recent reports have sent shockwaves through financial circles, painting a stark picture of the United States’ escalating debt crisis.
This is not just an American problem; it’s a puzzle that affects economies, industries, and livelihoods worldwide. So, buckle up as we dive deep into the heart of the ‘US Debt Crisis Explodes,’ a story that demands our attention, understanding, and action. Stay tuned as we navigate through the complexities, shed light on the underlying causes, and seek insights from experts on what the future may hold in this critical juncture of global finance.
U.S. regulators are like the guardians of the financial galaxy, and they’ve just unveiled a plan that’s meant to be a protective shield for regional banks. These banks, which have at least $100 billion in assets, are being asked to do something pretty unique. They’ve got to put on their financial armor, a layer of long-term debt.
Think of it like a safety net that’s there to catch them if they fall, especially in the case of government intervention. It’s all about making sure that if there’s a hiccup, it doesn’t cause a financial avalanche.
This grand plan comes on the heels of a regional banking crisis that popped up a few months back. But in this financial situation, we’ve got the Treasury Department, the Office of the Comptroller of the Currency, the Federal Reserve, and the Federal Deposit Insurance Corp joining forces to save the day.
They’re laying down the rules, building on ideas they had back in July to make the financial world a safer place. What are the new rules? Well, it’s like giving the banks a challenge, they’ve got to keep a certain amount of long-term debt in their pockets.
They are expected to be ready to handle losses equal to 3.5% of their average total assets or 6% of their risk-weighted assets, whichever is higher. And to prevent the domino effect, they’re telling banks not to hold too much debt from other banks.
But it’s gonna cost the banks a bit more to get it all set up. And that could put a little squeeze on their earnings, especially after some banks had their credit ratings downgraded by those credit-rating wizards this year.
But don’t worry, it’s not all doom and gloom. The banks have a bit of time, three years, to be exact, to get their financial ducks in a row and meet these new rules. And guess what? Many of them are already in pretty good shape. The regulators estimate that about 75% of the required debt is already chilling in the banks’ portfolios.
And you know what? The financial markets have their situation too. The KBW Regional Banking Index, which has been having a rollercoaster year, had a little uptick of less than 1% in response to this news.
The head of the FDIC, Martin Gruenberg, kind of hinted at these changes during a talk he gave at the Brookings Institution. So, it looks like the regulators are like the wise mentors in this tale, they’ve got their eyes on the horizon and are making sure things are running smoothly in the financial realm.
We’re looking at a proposal that doesn’t just affect the big players in the banking arena but also zooms in on banks with assets of at least $100 billion. This move comes as no surprise, given the shockwaves sent through the system when Silicon Valley Bank experienced an unexpected collapse in March.
This sudden event grabbed everyone’s attention, from customers to regulators to executives, and highlighted some brewing risks in the world of banking. So, what’s in this proposal?
Well, it’s like a toolkit to strengthen the financial foundation. It includes steps to increase the amount of long-term debt that banks hold, think of it as an extra cushion to absorb losses in case regulators have to step in.
Another tweak involves closing a loophole that allowed mid-sized banks to avoid acknowledging losses in bond holdings. Plus, banks are being asked to come up with more robust ‘living wills’ or plans that outline how things will be handled if the bank faces failure.
But wait, there’s more. Regulators are also looking at updating their guidelines on risk monitoring. They’re focusing on things like keeping an eye on high levels of uninsured deposits.
The pricing of deposit insurance is also being examined to discourage risky behavior. This is particularly important because the three banks that got taken over by authorities this year had sizable amounts of uninsured deposits, which played a major role in their downfalls.
Steven Van Metre
Sep 11, 2023
Economic Horror Imminent as Alarming Signs Point to This Country’s Collapse
Lena Petrova, CPA – Finance, Economics & Tax
Sep 11, 2023
U.S. DOLLAR AT RISK: Japan, China and Saudi Arabia Are ACCELERATING Sell Off Of U.S. Treasuries
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