Bank Watch ...

[BritDownUnder]

I used to work for HSBC Life in Southampton. While I was probably not the best employee in the Actuarial Department their managers were real monsters.

I have shares which I have kept and lost about 60% of my money on. I think this bank is a survivor though. A few smaller UK banks may go bust or get taken over by HMG.

[adam2]

Banking problems continue.
Silicon Valley bank in America recently failed, followed by Signature Bank, of New York and now doubts are surfacing about Credit Suisse.

The American government have guaranteed deposits in the two American banks, and the Swiss government/Swiss central bank have stated that Credit Suisse will be fine.

https://www.bbc.co.uk/news/business-64964881

[BritDownUnder]

During my brief period of work in the City in the 1990s the Swiss banks were difficult places to work at. UBS was known as "Unemployed before Saturday" and SBC was known as "Sacked before Christmas".

Credit Suisse seemed a bit better ran but I suppose there is only a certain amount of money laundering that one can do. And they have some competition from British dependencies and former territories. To be fair on the Swiss I think their Swiss division is the one which is still profitable.

I pulled another 4 grand from the UK last night to take advantage of a high in the pound recently. Another Tesla battery will look good I think.

[adam2]

Emergency loan now secured.
https://www.bbc.co.uk/news/business-64973321

[adam2]

ANOTHER American bank in trouble. First Republic Bank rescued by a consortium of other banks.

https://www.theguardian.com/business/li ... iness-live

[Potemkin Villager]

Must just pop out and borrow a few million to "shore up my finances".

What's to go wrong?

[Potemkin Villager]

Apparently the big Swiss bank in trouble "got caught up in" the problems of the Silicon Valley bank according to the Beeb!
I makes it sound as if they were just some innocent spectator in the wrong place at the wrong time.
Just love these misleading narratives.

Oh and the Bank of England is not going to "object" to one Swiss bank taking over another as if it is somehow their business! As far as I know Switzerland has never been part of the British Empire, the Sterling Zone or even the Evil European Empire for that matter.

[adam2]

Latest news, UBS agrees to rescue/take over Credit Suisse. https://www.bbc.co.uk/news/business-65007871

[clv101]

Latest news, UBS agrees to rescue/take over Credit Suisse. https://www.bbc.co.uk/news/business-65007871

The $3bn they are offering is WAY down on total stock equity a few months ago (like just 4%), there must be a lot of junk on their books.

If we are looking down the barrel of another financial crisis, what happens this time? Are the 'too big to fail' institutions going to morph into 'too big to save'? Will interest rates crash back to ~zero? More QE? Impact on inflation?

[PS_RalphW]

I have no idea what the end result will be when this house of cards that is the banking system and fiat money implodes. Some things are obvious. Shares will lose all value. Large depositors will lose all their money, sending many viable businesses bankrupt. Governments will try to inflate their way out of crisis, not least because that will reduce the real cost of their own debt and liabilities held in their own currency. Pension funds would suffer badly.

Which leaves the questions for me personally, should I keep my wealth in property, even if it is not the property I want my children to inherit, and will the government honour the pledge to pay the small depositors of failed banks and building societies? If banks are bought out and collapse in domino form, I could find my carefully distributed savings concentrated into a single legal entity leaving most of it above the level the government will protect when that bank also fails.

Estate agents are already saying that the falling housing market is bottoming out, which I think reflects the general level of inflation. In "real terms" the value of property is still falling.

[UndercoverElephant]

Are the 'too big to fail' institutions going to morph into 'too big to save'?

No. They will always be saved.

Will interest rates crash back to ~zero?

I don't know.

More QE?

Yes.

https://www.bbc.co.uk/news/business-65010255

Central banks have moved globally to keep credit flowing after an unsettled period in the US banking sector and the Credit Suisse merger.

Six central banks, including the Bank of England, announced they would boost the flow of US dollars through the global financial system.

On Sunday the struggling Credit Suisse was taken over by UBS in a Swiss government-backed deal.

The US dollar liquidity "swap line" arrangement will run from Monday.

In a statement the Bank of England, Bank of Japan, Bank of Canada, the European Central Bank, US Federal Reserve and Swiss National Bank launched the co-ordinated action to "enhance the provision of liquidity".

Impact on inflation?

Depends on what happens with interest rates. Either way it goes up, but if they cut interest rates then it goes up much faster.

[UndercoverElephant]

I think an analogy helps.

QE is a drug, to which the western world is addicted. This happened because taking the drug was less painful than facing up to the reality of the limits to growth. The addiction eventually causes a disease called in inflation, which will eventually prove fatal if it gets completely out of control. There is a medicine for the disease, and that is high interest rates. But the medicine has effects (negative pressure on growth) that are closely related to the original cause of the addiction.

The addict will always take more of the drug, as a short-term solution, regardless of how much disease it causes down the line. The question is whether or not it is also willing to swallow enough medicine to stop the disease from getting completely out of control.

[Vortex2]

<sigh>

Is this The Big One?

Should I take my savings out in cash.. if they let me?

[kenneal - lagger]

..............

Should I take my savings out in cash.. if they let me?

It is wise to have a good cash holding if you have a safe place to keep it. If things get very bad I would think that even cash will become pretty worthless so large amounts of savings will only be worth what you can buy with them immediately.

We have tried to build up a stock of useful things that can be used to produce food, tools and utensils in a future where they can't be bought

[johnny]

<sigh>

Is this The Big One?

Should I take my savings out in cash.. if they let me?

Sounds like a good idea. Did you try it out during all the peak oil scares to see if it worked okay? Would have been some good practice.