Nearly 200 US banks vulnerable to SVB-like collapse, study reveals
RBC Capital Markets head of U.S. equity strategy Lori Calvasina discusses the state of the U.S. economy in the aftermath of the Silicon Valley Bank collapse and ahead of the Federal Reserve March meeting.could be vulnerable to the same fate as Silicon Valley Bank .suggests that 186 American banks could fail if half of their depositors suddenly withdrew their funds.
"Our calculations suggest these banks are certainly at a potential risk of a run, absent other government intervention or recapitalization," the economists wrote. "Even if only half of uninsured depositors decide to withdraw, almost 190 banks are at a potential risk of impairment to insured depositors, with potentially $300 billion of insured deposits at risk," the study's abstract reads. "If uninsured deposit withdrawals cause even small fire sales, substantially more banks are at risk."
SANTA CLARA, CALIFORNIA - MARCH 10: A worker tells people that the Silicon Valley Bank headquarters is closed on March 10, 2023 in Santa Clara,Despite being a sound long-term investment, they were not worth as much as when SVB originally bought them. SVB invested too heavily in longer-term mortgage securities with more than 10 years to maturity.
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