IMF says US bank failures could be a prelude to bigger problems

The International Monetary Fund (IMF) in a new report spoke about the risks to the US financial system. The organization’s experts believe that the recent bank failures may be a harbinger of more serious problems.

“The recent collapses of large, internationally inactive banks, which have so far had only a modest effect on credit conditions, could potentially be a prelude to more serious and rooted systemic financial stability problems,” the report said on website IMF.

One of the risks the fund calls the preservation of high interest rates by the Fed. According to the IMF, “unrealized losses from investments in long-term securities will result in the cost of new financing for households and corporations becoming unmanageable for banks and non-banks.”

In addition, the IMF warned about the consequences of negative events in the US financial system for the world. The organization believes that a possible downturn in business activity in the US, a stronger dollar and high Fed interest rates could provoke “significant negative macro-financial consequences for the rest of the world.”

Since March, three regional banks have closed in the US: Signature Bank, Silicon Valley Bank and First Republic Bank. According to the Financial Times, Arizona-based Western Alliance Bank is considering a sale.

About the banking crisis – in the material “Kommersant” “At least three volumes per month.”

Leonid Uvarchev

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