Banks create a brink for recession.
Jennifer Sor, 6-26-2023, a junior reporter for Markets Insider. She graduated from UC Santa Barbara with a BA in Economics and English. "Banks will suffer 2008-style losses if inflation isn't controlled, top banking expert says," Markets Insider, https://markets.businessinsider.com/news/stocks/banking-crisis-2008-recession-bank-failures-financial-crash-bis-2023-6 ---ML
The banking crisis that unfolded earlier this year isn't over, and banks could be hit with losses akin to what was seen in 2008 if the Federal Reserve doesn't get inflation under control, according to Bank for International Settlements.
In its annual report published Sunday, the so-called bank for central banks pointed to the lasting ramifications of 2023's bank failures, starting with the collapse of Silicon Valley Bank in early March. SVB's implosion, sparked by losses on its bond holdings as interest rates rose and the value of its fixed income securities plummeted, snowballed into a wider regional bank crisis that resulted in the fall of Signature Bank and First Republic Bank.
Experts say the banking failures raised the risk of recession and the risk that more lenders are teetering on the brink. BIS general manager Agustín Carstens warned of bank losses of "a similar order of magnitude" as the 2008 financial crisis.