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More 186 US banks well-positioned for collapse, SVB analysis reveals

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The perfect mix of losses, uninsured leverage and a greater loan portfolio, among other factors, resulted in the fall of Silicon Valley Bank (SVB).

Comparing SVB’s situation with other players revealed that nearly 190 banks operating in the United States are at potential risk of a run.While SVB’s collapse came as a reminder of the fragility of the traditional financial system, a recent analysis by economists showed that a large number of banks are just uninsured deposit withdrawals away from a devastating collapse.

It read:Monetary policies penned down by central banks can have a negative impact on long-term assets such as government bonds and mortgages, which can, in turn, create losses for banks.

The report explains that a bank is considered insolvent if the mark-to-market value of its assets — after paying all uninsured depositors — is insufficient to repay all insured deposits.The data in above graph represents the assets based on bank call reports as of Q1, 2022.

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