Dr. Melita Mehjabeen’s Post

Wall Street Journal article from today: "Fed Backpedals on Plan to Increase Big Bank Capital," https://lnkd.in/eRWHCUCn I would be interested in what bankers have to say about these proposed capital requirements for big banks. I'm sympathetic to banks that want to be able to lend freely without a lot of government regulations reducing efficiency. But I'm also sympathetic to the Federal Reserve, whom these banks come crawling to for bailouts when things go bad. I'm a believer in the idea of moral hazard, where bailouts for banks encourages riskier behavior by banks because they don't incur the costs if things go awry.

From the Head of the Fed: "I'm sure there will be BANK FAILURES...." The WHY NOW is not explained. It's because the US is entering a 'debt spiral of death'. It is borrowing to pay for debt interest. When the $600bn Credit Card and unsecured debt market goes 'pop' due to delinquencies, then the world takes a sharp breath and says - 'f*** this for a game of soldiers'. Commercial Real Estate is not being refinanced without a 50% haircut at least. Residential Real Estate is not being refinanced without a 50% haircut at least. All the loan books are up against rapid delinquency ratios, so they will be getting a similar hair cut, its just not being reported because that's Private Market stuff - but guess who has been lending lots of credit to local US citizens to help with the Cost of Living Crisis? Yup local banks. Private Equity and Private Markets aren't reporting publicly their own exposure unless listed - and I expect there is a lot of leaning and leveraging that's been done on the Crypto sector to help prop up the balance sheet. Smoke and Mirrors - the American Dream is turning into a nightmare and that's bad news for everyone - except those who are not tethered to the blinkered belief 'everything is just fine'. Just Saying 🤷♂️

𝐋𝐞𝐭'𝐬 𝐭𝐚𝐥𝐤 𝐚𝐛𝐨𝐮𝐭 𝐡𝐨𝐰 𝐛𝐚𝐧𝐤𝐬 𝐚𝐫𝐞 𝐝𝐨𝐢𝐧𝐠! ❓Are we heading into the next banking crisis? ❓Why should you keep an eye on the US commercial real estate market? ❓Are banks and regulators taking the situation seriously? 𝐅𝐢𝐧𝐝 𝐨𝐮𝐫 𝐭𝐚𝐤𝐞 𝐨𝐧 𝐢𝐭 𝐡𝐞𝐫𝐞: https://rb.gy/89fkbi. One thing is for sure: 𝐁𝐚𝐧𝐤 𝐬𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐢𝐬 𝐧𝐨𝐭𝐡𝐢𝐧𝐠 𝐭𝐨 𝐛𝐞 𝐭𝐚𝐤𝐞𝐧 𝐟𝐨𝐫 𝐠𝐫𝐚𝐧𝐭𝐞𝐝 - even if to some, it might have seemed like it for a while. #banks #assetprotection #wealthmanagement

𝐋𝐞𝐭'𝐬 𝐭𝐚𝐥𝐤 𝐚𝐛𝐨𝐮𝐭 𝐡𝐨𝐰 𝐛𝐚𝐧𝐤𝐬 𝐚𝐫𝐞 𝐝𝐨𝐢𝐧𝐠! ❓Are we heading into the next banking crisis? ❓Why should you keep an eye on the US commercial real estate market? ❓Are banks and regulators taking the situation seriously? 𝐅𝐢𝐧𝐝 𝐨𝐮𝐫 𝐭𝐚𝐤𝐞 𝐨𝐧 𝐢𝐭 𝐡𝐞𝐫𝐞: https://rb.gy/89fkbi. One thing is for sure: 𝐁𝐚𝐧𝐤 𝐬𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐢𝐬 𝐧𝐨𝐭𝐡𝐢𝐧𝐠 𝐭𝐨 𝐛𝐞 𝐭𝐚𝐤𝐞𝐧 𝐟𝐨𝐫 𝐠𝐫𝐚𝐧𝐭𝐞𝐝 - even if to some, it might have seemed like it for a while. #banks #assetprotection #wealthmanagement

It's good that we have a plurality of views about bank capital on Bloomberg Opinion. Here's the editors'>  "Without stronger rules in place, the odds of another financial crisis — and massive bank bailouts — will continue to grow." And here's mine >> Now that the post-2008 capital rules are all (mostly) finally settled, supervision is where the money and effort must be directed https://lnkd.in/eEqPbFKR https://lnkd.in/ej8wJGFs

𝐋𝐞𝐭'𝐬 𝐭𝐚𝐥𝐤 𝐚𝐛𝐨𝐮𝐭 𝐡𝐨𝐰 𝐛𝐚𝐧𝐤𝐬 𝐚𝐫𝐞 𝐝𝐨𝐢𝐧𝐠! ❓Are we heading into the next banking crisis? ❓Why should you keep an eye on the US commercial real estate market? ❓Are banks and regulators taking the situation seriously? 𝐅𝐢𝐧𝐝 𝐨𝐮𝐫 𝐭𝐚𝐤𝐞 𝐨𝐧 𝐢𝐭 𝐡𝐞𝐫𝐞: https://rb.gy/89fkbi. One thing is for sure: 𝐁𝐚𝐧𝐤 𝐬𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐢𝐬 𝐧𝐨𝐭𝐡𝐢𝐧𝐠 𝐭𝐨 𝐛𝐞 𝐭𝐚𝐤𝐞𝐧 𝐟𝐨𝐫 𝐠𝐫𝐚𝐧𝐭𝐞𝐝 - even if to some, it might have seemed like it for a while. #banks #assetprotection #wealthmanagement

BREAKING NEWS: New York Community Bank NYCB, the bank that acquired the collapsed Signature Bank, has fallen 40% after earnings this morning Remember, the Bank Term Funding Program (BTFP) instituted by the Fed will cease making new loans as scheduled on March 11. We believe there will be more surprises in the banking sector this year.. …CRE paper had and will have broader impacts across this sector I wonder why the Fed removed "banking system soundness" in today's address... 🤔 #banks #risks #bankingindustry #fed #insights #breakingnews

Run on banks High quantum of withdrawals owing to the fear or insecurity of banks going bust; insolvency rumor; financial mismanagement. Such a condition would induce a liquidity crisis in the financial system. In such a situation, depositors, in a panic mode, start withdrawing funds. Washington Mutual collapse was the largest in history and occurred amidst the housing crisis of 2008. A more recent example of bank run was of the Silicon Valley Bank. These collapses cause economic contraction and instability in the banking system. In 1933, Federal Deposit Insurance Corporation (FDIC) was established so as to reduce the instances of bank run and preserve public confidence and ensure stability of the financial system. These can be mitigated by borrowing money from the Central Bank or other financial institutions. Implementing oversight and regulation also helps in prevention. Share your thoughts in the comments below. Stay connected to explore more on risk management. #liquidityrisk #financialcrisis #banks #financialriskmanagement

"The Fed and two other federal regulators are moving toward a plan that would significantly lessen a nearly 20% mandated increase in capital for the biggest U.S. banks, according to people familiar with the matter." There are two components of the proposal's burden. The increase in amount of capital required and the increase in the costs to calculate and monitor compliance with the requirements. Unless the requirements have been drastically tailored for Category III and IV banking organizations (e.g., market and operational risk calculation infrastructure, defaulted exposures tracking), I doubt the latter burden has been fixed. #BaselIII https://lnkd.in/eb5gUHMv

𝐋𝐞𝐭'𝐬 𝐭𝐚𝐥𝐤 𝐚𝐛𝐨𝐮𝐭 𝐡𝐨𝐰 𝐛𝐚𝐧𝐤𝐬 𝐚𝐫𝐞 𝐝𝐨𝐢𝐧𝐠! ❓Are we heading into the next banking crisis? ❓Why should you keep an eye on the US commercial real estate market? ❓Are banks and regulators taking the situation seriously? Find our take on it here: https://rb.gy/89fkbi! One thing is for sure: 𝐁𝐚𝐧𝐤 𝐬𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐢𝐬 𝐧𝐨𝐭𝐡𝐢𝐧𝐠 𝐭𝐨 𝐛𝐞 𝐭𝐚𝐤𝐞𝐧 𝐟𝐨𝐫 𝐠𝐫𝐚𝐧𝐭𝐞𝐝 - even if to some, it might have seemed like it for a while. #banks #assetprotection #investing