Is US Bank now trustworthy?

 

  1. Lax lending standards: Banks were lending money to borrowers who were not creditworthy and did not have the ability to repay their loans. This led to a surge in defaults, particularly in the subprime mortgage market.

  2. Housing market bubble: There was a significant increase in housing prices, which created a false sense of security and caused many people to take on more debt than they could handle. When the housing market collapsed, many homeowners found themselves with homes worth less than their mortgages, making it difficult to refinance or sell their homes.

  3. Complex financial instruments: Many banks had invested heavily in complex financial instruments such as mortgage-backed securities, which were difficult to value and understand. When the underlying assets, such as the subprime mortgages, began to default, the value of these securities plummeted, causing significant losses for the banks.

  4. Lack of oversight: There was a lack of oversight and regulation in the financial sector, which allowed banks to take on excessive risk without sufficient safeguards in place to protect against failure.

  5. Interconnectedness: The failure of one large financial institution, such as Lehman Brothers, had a domino effect on other financial institutions, causing a widespread panic and loss of confidence in the financial system. This further exacerbated the crisis and led to additional bank failures.

#BankCollapse #SVBCollapse #USAFedralReserve #ShareMarketCollapse #GlobalEconomics #Love #CreditSwiss

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