Topic: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession - page 2. (Read 378 times)

More reasons to be wary of keeping all your wealth in banks. Now's probably a good time to have a vault installed. Maybe even jewelry might be worth keeping.


We do need cash, at least that's one thing that banks are still useful for. Hopefully it don't get so bad that banks restrict the amount of money that can be withdrawn like what happened when Greece went bankrupt. I'm just curious, do you stay within the government-insured limit of deposit?

Absolutely. Especially with low interest rates that encourage loose lending yet again, just like pre-GFC times.

If you look at some of the banks in India that are shutting down and becoming insolvent, the problem should already apparent. And it's hard to believe that India is the only nation that has these issues, they are just likely to be concealed right now in other countries.

People should realise this, and diversify into safe haven assets before it happens.

We are certainly going to have a repeat, if thats the most useful thing I can do today on this forum then I got to make the super simple point: this failure event is forthcoming.   The fact is you are on the Bitcoin forum where Satoshi and others foresaw the need for an alternative to the traditional system, it was clear to them back in 2009 that this was required, QE cannot fix the failings of 2008 or what happened before and since then.   It will repeat until the mistake is stopped, nobody is forcing that true its just how economies have always worked.

Most people have their monies in the banks because without it they are not going to get paid and that's the only reason. People's don't trust banks mostly because of the financial crisis in 2008 where they lost their savings but it seems those banks survived and they are making profits whilst no effort is being made to repay those who lost their monies.

There is a reason we call crises when the banks or the institutions or the government cannot handle the inflation and we have seen that in the past and every time the crisis happens in different forms and these things happen because of the miscalculation by the government, if there is any back up plan then the entire financial structure will crumble and that happened in Venezuela, Zimbabwe to name a few and even in the last crisis the governments were able to restore the issue by giving financial aides to banks but you cannot expect to do the same every time. 

I wouldn't say that they are the enemy here since they have also given you a job, banks are one of the biggest boosters of the economy in a country even though they are paying you "peanuts" they are still paying you and if you don't want it you have an option to do your best to get promoted or leave them for a better paying job. Banks are there to finance people who are in need may it be a loan for a business or anything you want to buy on credit. If this recession hits hard on banks then for sure that the economy will also be affected greatly.

The segregation in banking system has become more pronounce now. There are many small banks which have bad debts too, for them surviving the incoming recession would be really hard. What I think is that countries should have a few big banks which can sustain during such times. In India, because of the increasing problems of bad debts, government is merging public sector banks. This I guess is a welcoming move but the effect is not always good because of the unmatched synergies. 

In my country Philippines, bank interest rates on deposits are becoming lower and lower. But I don't think they are losing as they continue to reach their quarterly income targets. Our interest rates are dying most probably because there is too much liquidity. Or maybe my country is not in the same situation with American, European and Chinese banks. Some economists are saying our country is becoming one of the safe sanctuaries on the current trade war.    

If financial crisis rise once again like in 2008 then the market will collapse and poor people will suffer the most as banks and governments will protect the interest of elite businessmen to protect them.Most of the banks have policies to face such problems like they have started to make reserves in form of gold and fiat to solve this issue and these digital coins can be used by governments at that time to boost the economy.

I believe this is definitely happening, what I'm concerns is how my government to handles this case, because when the bank collapsed that must be responsible to resolve this is the government, if the government only does the same thing as in 2008, then the government only continues to protect the capitalist who take part in this repetition conditions.

The same history can be repeated because the many big lessons of the past and the recommended changes that should have taken place in the banking are largely ignored in the name of making more profits. Instead of getting stricter, the whole banking industry decided to relax and enjoy the sunshine. Now, the shadow of the past (the great 20018 economic crisis that started in the USA and which circled around the globe) is now starting to be showing up. We are hoping that the banking industry will be listening to this urgent warning and will be decisive enough to patch up possible leaks of the boat they are in. This around, it would be a great catastrophe to affect all countries especially those economies which are not resilient and not prepared.

Recession is an integral part of the economic cycle. It is not there simply because a failure is done somewhere along the way. It is there because it is part and parcel of the economic cycle. The economic activities of a certain country or even region constantly expand and contract. That is the norm in the market. The spending rises and falls. And when the spending falls way below the normal level, it is when recession takes place. It is as old as humanity. It does not have anything to do with Bitcoin. 

I echo these thoughts. Even though bitcoin per se is considered as disruptive in today's standards, I still don't buy that bitcoin and other crypto are the reasons why there will be a recession. For the most part, banks and governments cause these recessions themselves until it creates a chain reaction on different parts of the industry because by then, everyone and their mothers would be in a hurry to get their assets out of a bank, causing it to implode from the inside and boom, money is gone.


For years, I have tried to answer this question: where should I put my money when even banks don't know where to put theirs? For every economic collapse, a different asset shines, but gold together with other precious metals somewhat remained stable, or so I think they are during downturns. Most probably I won't be storing my money in the banks, not during this expected collapse.

Banks are the real enemy of the people, I once worked in a commercial bank in Nigeria, I had to resign because of the volume of work they pile on me and pay peanut, I happen to be part of some cost management in my local branch, we spend money on many useless things and careless about staff warfare compare to what we spend huge money on. Banks are the real bad guys when they are distressed, they get a bailout.

Bitcoin is irrelevant since its users only accounted for less than 0.1% of the global population, its often criticized by Nouriel Roubini that said

https://www.banking.senate.gov/imo/media/doc/Roubini%20Testimony%2010-11-18.pdf

In short, way more people use fintech products instead of Bitcoin.

A recession occurs because of mismanagement, boom and bust cycle, geopolitical instability, etc., not because of Bitcoin.

During the 2008 crisis, some banks were doing well financially and had no need to be bailed out.

The main determining factor for whether banks needed bailouts in 2008 hinges upon a commercial banking versus investment banking paradigm.

Commercial banks are more prone towards limiting themselves to smaller profit margins from traditional bank revenue sources. This implies interest earned from loans or generally reliable and stable streams of income. Investment banks have a more untraditional model for generating revenue. They normally have higher potential profit margins on average, but accumulate greater risk as a result. Investment banks also collect a higher proportion of depositor's funds and invest them in whatever ventures they choose, which leaves them in a more leveraged position if investments go bad.

In recent times, within the past 2 decades, most banks shifted away from commercial banking towards investment banking paradigms. And yes there is a high correlation between this trend and the higher proportion of bank failures we've witnessed.

investment banks have taken on greater risk, utilizing a higher percentage of their depositor's funds, with more spectacular negative outcomes. This is the reason so many banks are failing globally, while being unable to pay their customers. Banks are gambling on greater risk / greater reward investments, with the funds of their depositors--those who traditionally believe banks are stable and safe places to store money.

This crisis or phase is just to filter out which banks are really functional and is profitable for only those who are strongly inclined of banking can survive the phase. Also, banks are near into experiencing recessions because of the enormous emergence of digital banks plus the growing adaptation of bitcoin which people is loving more because of its decentralization and the technology provided by blockchain which can hold theur assets without fees and threats unlike banks.

China is China, tho.  I'm in the U.S. and I remember very well how many 'stress tests' the banks that got the bailout money had to go thru in order to pay out dividends on their common stock again.  The fact that most banks in the U.S. passed those tests doesn't necessarily imbue me with total confidence in them, but it is at least mildly reassuring.

I would *not* keep any surplus money in a banking account, however.  Interest rates aren't even close enough to warrant that nowadays.  Maybe if deposits were paying 10% interest I might do it, but I'm a firm believer in putting such money to work if I'm not going to spend it.  The only way I know how to do that is to invest it, so for the past 10 years it's been mostly stocks and a smattering of crypto.  

The banks can do what they want, and if they all suddenly failed it would be complete chaos but I wouldn't be bankrupted.  For one thing, even if I did have money deposited in a bank it's insured by the federal gov't...but the main reason is that I *don't* have any money in a bank account except for a checking account which I just use for paying bills.