Regional Banking Dominos Falling: A Grim Warning for the US Banking System
Professor Amit Seru, a finance professor at the Stanford Graduate School of Business, has warned that the collapse of several high-profile banks is most likely not an isolated phenomenon. Adverse conditions have significantly weakened the ability of many banks to withstand another credit shock, and a big one may already be on its way, with almost half of America’s 4,800 banks potentially insolvent. Rising interest rates and the looming area of concern in the commercial real estate sector could spark panic, and it’s vital for policymakers and experts to monitor the situation closely to mitigate the potential impact of a credit crunch on the US economy.
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