![]() With a cost of living crisis and increasing interest rates and wages, there are few businesses out there not feeling the heat even just a little bit. Well, right now things in the business and finance world are certainly 'hot'. We’ve all heard the term “strike while the iron is hot”, right? □ This is all probably a storm in a teacup, but on the off chance it isn't - be nimble!! □ Lastly, be aware that some of the smaller internet 'banks' out there aren't actually banks (they call themselves e-money institutinos), and don't have traditional FSCS coverage. ![]() If you've got balances over the insurance limit □, spread your deposits across a few banks to double or triple up on your protection. Check with the FSCS here is you're covered. So, what can we do about it? As always, the most nimble and informed of people will fare the best. Just this week, Credit Suisse CDS (credit default swaps) were their most expensive ever (significantly worse than in the banking panic of 2008), and the bank has been unable to publish its annual report as the US regulator has beef with how they've been doing their risk management. The banking model of 'Borrow short and Lend Long' is being busted in the US because of the shape of the yield curve and changes to interest rates. To me, SVB is screaming out □ that there is significant stress in the financial services industry. After 2008, we brought in so much more regulation and capital requirements, that banking runs shouldn't happen. What I can say is that banks shouldn't fail. Maybe this is true □♀️, and to be honest, I don't have the brains or know-how to be able to say either way. There's plenty of people quick to point out that SVB in particular had its own problems and is not indicative of systemic risk or a wider banking run. This weekend, two banks in the USA failed and were shuttered by the regulator (Silcon Valley Bank and Signature Bank of NY). ![]() Is this week 'Groundhog Day' and 'Its a Wonderful Life' merged into one? □️
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