22. September 2023

• Three banks recently collapsed (Silvergate, Silicon Valley Bank, and Signature Bank) due to diverse challenges.
• Economists have discovered more than 186 banks in the US that are at risk of collapsing.
• Analysts found that if half of the uninsured depositors move to withdraw, almost $300 billion of insured deposits will be at risk.

Banks That Collapsed Recently

Recently, Silvergate faced multiple regulatory actions due to its dealings with the bankrupt FTX exchange, its founder Sam Bankman-Fried and its sister company Alameda Research. It also cited the 2022 bearish market as part of the challenges that made it insolvent. On the other hand, Silicon Valley Bank failed due to many losses in its operations and other factors while Signature Bank also faced challenges it couldn’t handle, leading to state intervention.

More Banks At Risk Of Collapse

Economists have discovered more than 186 banks in the United States are already positioned to crash. A recent report revealed that up to 190 banks in the US are already on the brink of a crash when analyzing the failed Silicon Valley Bank. The analysts found that 10% of US banks currently have more unrecognized losses than SVB and their capitalization is higher than 10% of existing banks but kept more share of uninsured funding since only 1% had more uninsured leverage.

Impact Of Federal Reserve Moves

The economists analyzed how US Federal Reserve moves affect the sector’s financial stability by examining asset exposure of US banks following an interest rates hike. Unfortunately, their analysis revealed a shortage on book value worth $2 trillion for loan portfolios held until maturity making up for asset exposure which could put many US banks at risk if half of their uninsured depositors make withdrawals causing small fire sales.

Consequences Of Uninsured Depositor Withdrawals

If half of uninsured depositors move to withdraw funds from bank accounts, almost $300 billion dollars worth insured deposits will be put at risk according to analysts’ findings. This could lead to massive economic ramifications if not addressed properly by policy makers and stakeholders alike who should strive towards creating a stable environment for all banking activities within their jurisdiction/sovereignty so as not to cause any further economic distress especially during this time period where global markets have become increasingly volatile due to ongoing pandemic situations around world markets.


It is important for policy makers, stakeholders and governments alike take into consideration all potential risks associated with banking activities in order create a safe environment for all related activities within their jurisdiction/sovereignty so as not cause any further economic distress during these times where global markets remain highly volatile due pandemic situations occurring around world markets .