The fragility of the U.S. banking system

Spread far and wide

Issues contributed:

• There are great number of U.S. banks with a high risk of failing, if bank runs recommence.

• Recession is a likely to act as a trigger for another round of bank runs.

• The measures authorities are considering to quell the runs are likely to be ‘draconian’.

In this post, I will continue to mull through the U.S. second quarter banking data. It continues to paint a worrying picture of illiquid and fragile banking system, on which I first warned on 24 February. While the ‘silent run’ shows signs of stabilizing, for now, the fast approaching economic downturn can change this in an instant.

GnS Economics has published a deposit withdrawal warning for four another U.S. banks. Next week we start to publish a list of the most safe U.S. banks.

In search for liquidity