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With debts exceeding $1 trillion and shadow banks borrowing like crazy, the U.S. banking crisis has worsened

With debts exceeding $1 trillion and shadow banks borrowing like crazy, the U.S. banking crisis has worsened

With debts exceeding $1 trillion and shadow banks borrowing like crazy, the U.S. banking crisis has worsened.

According to the Financial Times, U.S. financial institutions have made more than $1 trillion in loans to shadow banks such as fintech companies and private credit groups.    

With debts exceeding $1 trillion and shadow banks borrowing like crazy, the U.S. banking crisis has worsened

You must know that the banking crisis broke out in the United States last year, and 200 banks such as Silicon Valley Bank and Signature Bank went bankrupt and collapsed.

Now, the US shadow banking has been exposed to more than $1 trillion in debt, which means that the crisis in the US banking industry may return.    

With debts exceeding $1 trillion and shadow banks borrowing like crazy, the U.S. banking crisis has worsened

Why?

According to the Federal Reserve's survey report, in the last year, the loan amount of these shadow banks in the United States increased by 12% compared with the previous year, while the overall loan amount of formal banks in the United States increased by only 2% year-on-year.

Why is there a six-fold difference between the former and the latter?

The root cause is that US shadow banks lend money to a series of risky borrowers that regulators discourage banks from lending directly, which translates to poor credit systems.

With debts exceeding $1 trillion and shadow banks borrowing like crazy, the U.S. banking crisis has worsened

And these high-risk borrowers are prone to bad debts, but it is precisely the shadow banks in the United States that lend them a lot of money, which is tantamount to "digging their own graves".

As a result, U.S. regulators have warned that the growing ties between traditional and non-traditional lenders could pose systemic risks.

In fact, such systemic risks have seriously affected the financial stability of the United States.

According to Bloomberg statistics, the total amount of loans to non-bank institutions in the US banking sector in 2010 was just over $50 billion, and so far this figure has exceeded the $1 trillion mark.

In other words, in just 13 years, the liabilities of US shadow banks have increased nearly 20 times.

In addition, according to statistics, shadow banking financing accounts for more than 6% of all loans in the U.S. banking industry so far, and slightly more than 5% of auto loans.

This means that with the crazy borrowing of shadow banking, the financial industry in the United States has been buried with a "huge thunder".    

With debts exceeding $1 trillion and shadow banks borrowing like crazy, the U.S. banking crisis has worsened

For this reason, Gerard Cassidy, an analyst at Royal Bank of Canada Capital Markets, said that there have always been a large number of leveraged loans in the U.S. financial market, and there may be huge risks hidden in this area, and investors need to pay more attention.

In fact, last year's banking crisis in the United States was the backlash of shadow bankers' lending frenzy.

Late last year, the Federal Deposit Insurance Corporation proposed requiring banks to disclose more data on the types of shadow banks they had lent to.    

With debts exceeding $1 trillion and shadow banks borrowing like crazy, the U.S. banking crisis has worsened

In addition, the acting director of the U.S. Bureau of the Comptroller of the Currency, Michael Quesu, said in a recent interview that he believes these unregulated lenders are pushing banks to issue lower-quality, higher-risk loans.

This kind of "race to the bottom" behavior will not only plunge the US banking industry into an embarrassing situation of a vicious circle, but also have a serious impact on the stability of the US financial system.

In fact, in addition to the shadow banking thunder, the situation of commercial real estate in the United States has also become a "sword of Damocles" hanging over the head of the American banking industry.

At the end of January, with the collapse of community banks in New York, the impact of U.S. commercial real estate on the U.S. banking industry had just begun.    

With debts exceeding $1 trillion and shadow banks borrowing like crazy, the U.S. banking crisis has worsened

According to the Mortgage Bankers Association, commercial mortgages for hundreds of large U.S. office buildings are due this year, with a total value of up to $117 billion.

In addition, up to $560 billion of mortgages will mature on U.S. commercial real estate by the end of 2025.

Now, with the impact of high interest rates, U.S. commercial real estate will face difficulties in refinancing and refinancing, which may further detonate the crisis in the U.S. banking industry.

On the one hand, the shadow banks in the United States are heavily indebted, and on the other hand, the US commercial real estate is "heavily indebted", which will surely make the cold winter of the US banking industry worse.    

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dark){.wx-root:not([data-weui-theme=light]),body:not([data-weui-theme=light]){-appmsgExtra-BG: #121212}}.rich_media_content p{clear:both; min-height:1em}td p{margin:0; padding:0}@media(prefers-color-scheme:dark){body:not([data-weui-theme=light]) .rich_media_content img:not(.wx_img_placeholder){filter:brightness(.8)}}@media screen and (min-width:1024px){body:not(.pages_skin_pc) :root{--appmsgPageGap: 20px;--appmsgPageBottomGap: 40px}}:root{--articleFontsize: 17px}:root{--sab: env(safe-area-inset-bottom)}:root{--wxBorderAvatarRatio: 3}:root{--discussPageGap: 20px}:root{--immersive-safe-bottom: env(safe-area-input-bottom)}: root{--appmsgPageGap: 20px;--appmsgPageBottomGap: 40px}*{margin:0; padding:0}.rich_media_content *{max-width:100%!important; box-sizing:border-box!important;-webkit-box-sizing:border-box!important; word-wrap:break-word!important}

div.autoTypeSetting24psection > p,div.autoTypeSetting24psection > section{margin-bottom: 24px;}

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