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Title: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Hydrogen on October 25, 2019, 08:38:42 AM Quote More than half of the world’s banks are already in a weak position before any downturn that may be coming, according to a report from consultancy McKinsey & Co. A majority of banks globally may not be economically viable because their returns on equity aren’t keeping pace with costs, McKinsey said in its annual review of the industry released Monday. It urged firms to take steps such as developing technology, farming out operations and bulking up through mergers ahead of a potential economic slowdown. “We believe we’re in the late economic cycle and banks need to make bold moves now because they are not in great shape,” Kausik Rajgopal, a senior partner at McKinsey, said in an interview. “In the late cycle, nobody can afford to rest on their laurels.” The decade since the global financial crisis has seen a wave of innovation in financial services, bringing new competitors from fintech startups to giants like Apple Inc. and Alphabet Inc.’s Google. Banks have pondered whether to compete with, partner with or acquire some of these newcomers. Some established firms have sought to rebrand as technology companies, in part to attract hard-to-get talent. McKinsey, whose clients are some of the biggest corporations in the world, consults on topics ranging from strategy and technology to mergers and acquisitions, outsourcing and stock offerings. In its report, the firm said banks risk “becoming footnotes to history” as new entrants change consumer behavior. Most recent attempts by banks to boost efficiency have been “business-as-usual,” it said. Banks allocate just 35% of their information-technology budgets to innovation, while fintechs spend more than 70%, McKinsey said. Combined with regulatory factors lowering the barrier to entry -- like open banking and looser requirements for startups -- the environment is increasingly conducive for newer firms to take share from banks. The report points to Amazon.com Inc. in the U.S. and Ping An in China as examples of technology firms that are capturing financial-services customers. To make matters worse for the old guard, the new players tend to go after the business areas that create the highest returns at banks -- credit cards, for example. Investors have taken notice. Globally, banks’ valuations have fallen 15% to 20% since the start of last year, McKinsey said, adding that “the drop in valuation suggests that investors anticipate a sharp deceleration in earnings growth.” Lenders can cut costs and find funds for technology by outsourcing what McKinsey calls “non-differentiating activities,” including some trading and compliance functions. Banks “need to get much more comfortable with external partnerships and being able to leverage talent externally,” Rajgopal said. Read more: BofA’s cloud expansion could ‘save a ton of money’ Another way to free up money: get bigger. BB&T Corp. and SunTrust Banks Inc. said as much when they announced their decision to combine earlier this year -- the biggest U.S. bank merger since the financial crisis. Rajgopal said he expects M&A to continue in the late cycle. “Going forward, scale will likely matter even more as banks head into an arms race on technology,” the report says. https://www.bloomberg.com/news/articles/2019-10-21/banks-must-act-now-or-risk-becoming-a-footnote-mckinsey-says .... This may not be a good time to have money stored in banks, if indeed more than 50% of them are weakened and may not survive an economic downturn. :) It should be mentioned that even china's largest and most prosperous banks are facing great difficulties atm. These negative trends relating to banks are not isolated events. Rather they are becoming normalized and widespread throughout the industry. Excitement and risk have a tendency to be correlated. Whether in gambling or investment markets, where one is found it is common to find the other. With many banks engaged in leveraged investments tied to global economies, upticks may produce profits, while a turn in the opposite direction can carry devastating effects. Hopefully we won't ever have another 2008 bank crisis. :( Even though everyone seems to be shouting exactly such a thing will happen inevitably from the mountain tops. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: mu_enrico on October 25, 2019, 09:35:04 AM I have experienced this situation where a lot of banks got liquidated in 1998 in Indonesia. Yeah, it was a mess, but from a business perspective, it's the way of removing unprofitable banks. The problem with this issue in the present day however, the Government of Indonesia now will "bailout" the users' saving account up to 2 billion IDR (about 142K USD) per person.
If that happens, guess how the government will pay? By printing more money from thin air, or in other words, debasing the currency. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: ivakar on October 25, 2019, 09:47:14 AM global recession can start from falling one system (huge) bank anywhere.
as it was in 2008, there the trigger was lehman brothers, after it fell, the whole world shake so now in 2019 we have deutsche bank which is now in the same position as it was with lehman bank, and could be the trigger that world's economy started falling apart Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Wexnident on October 25, 2019, 10:17:51 AM Some banks are already preparing for it. the De Nederlandsche Bank or Dutch Central bank has hoarded gold worth around €6 billion. They've already stated that once the recession starts and the market crashes, they could fall upon the gold they have and start all over again. A recession would most likely happen since I have not seen any progress to reduce the global debt that the world currently has. On the contrary, it has increased more and more and made it most likely impossible to pay it back.
Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Lucius on October 25, 2019, 12:52:23 PM Banks always play their game, and if they messed up, there is always a politics to save them from their sins, all to the detriment of their clients and all other residents of a country. If we wonder why politicians saved banks, the reason is simple and lies in the fact that there are strong and unbreakable links between banks and politics anywhere in the world.
From what I read in the posted article, only way for banks to survive is to adapt to new technologies and to merge. Traditional banking obviously has major problems in today's society, and it needs to make radical changes if we don't want to have a new recession every ten years I hope people have learned something from the last recession, money is not secure in banks unless there is a government guarantee for deposits up to a certain amount. But still, the vast majority of people believe in banks as the safest way to keep their money, although there are good alternatives, and one of them is certainly Bitcoin. From our point of view, the money invested in Bitcoin has not only been preserved but at one point has increased its value by as much as 100 times since 2015. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: ecnalubma on October 25, 2019, 12:59:37 PM This may not be a good time to have money stored in banks, if indeed more than 50% of them are weakened and may not survive an economic downturn. This is scary due to not only banks may close but also major businesses. I am also worried about innocent people entrusting almost all of their financial assets to banks without knowing the upcoming threats. I think if we suffer a financial crisis, it will be worst than the previous one. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: beerlover on October 25, 2019, 02:10:43 PM That is a scary stat, I mean I knew that there were a lot of banks that couldn't handle it when the time comes but I didn't know it was as high as 50%. If we get even 2 or 3 huge banks like JP Morgan level then we are going to have a world financial collapse once again. It is just not feasible enough.
Yeah, it is impossible to keep the world from going to a recession, finance is something that goes up and down but at the end of the day if the recession kills this many bank then we are looking at a unstoppable level of disaster that is unavoidable by any standard whatever we do about it. That is why having your money in bitcoin instead of bank could save you, at least if the world finance collapses you would have bitcoin that would gain value over fiat when that happens. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: LeGaulois on October 25, 2019, 02:59:27 PM In Europe, the banks struggle in NPL management, there are over 636 billion euros of non-performing loans. These same NPLs only represent 3% of the total loans granted, you may think it's quite low, I say it's subjective: Doesn't it remind you of the subprime mortgage crisis in the US.? Well at that time the US. banks had a rate of ~1.5%.
So banks need to increase their reserve but they can't, for a majority. On the top, their rentability is decreasing, and to compensate it in the current situation of low or negative rates they didn't find anything better than provide massive loans to bet on volumes... Latest stress tests: https://static.latribune.fr/full_width/1277866/bce-stress-tests-survie-banques-euro.jpg Quote The deterioration in banks' net liquidity position (as a percentage of total assets, on the Y-axis) shows a median survival period of 6 months (176 days) in the event of an adverse shock (orange curve) and 4 months (122 days) in the event of an extreme shock (red). In blue, the curve of the base scenario, without shock. (Credits: ECB (https://www.bankingsupervision.europa.eu/press/pr/date/2019/html/ssm.pr191007_annex~537c259b6d.en.pdf))Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: TrevorS on October 25, 2019, 04:01:18 PM I confess I think the figure is 50% slightly underestimated, I won’t be surprised if a much larger number of banks are not ready for the upcoming recession.
The banking system itself has a mechanism in itself which under certain circumstances will always fail. Usually this happens during a global recession, because people are in a hurry to get their money from the bank. I am sorry for those people who do not have time to collect their money from the bank, because they will not get absolutely nothing as it always was when the banks collapsed. Each time the same thing. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: 1Referee on October 25, 2019, 09:56:59 PM This may not be a good time to have money stored in banks, if indeed more than 50% of them are weakened and may not survive an economic downturn. All banks are inherently weak during a recession, or when they have too much exposure in x/y/x/ country or industry. I don't consider that to be much of a problem. The real problem is where we go with our money, and no one seems to have a proper answer to that question. One could say that buying Bitcoin or Gold is a good option, or real estate, but even when doing that, there will always be a significant part of our worth stored in bank accounts because a bank is still the best place to actually store our money. I personally have bank accounts with different large banks that with a high probability will receive financial support in case things turn ugly, because they are too big to fail. Another thing that you can do is to open bank accounts in foreign countries with a stable financial system and economy. In other words, diversification/distribution amongst different banks is what I suggest. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: STT on October 25, 2019, 10:05:24 PM Some banks are already preparing for it. the De Nederlandsche Bank or Dutch Central bank has hoarded gold worth around €6 billion. I'd love to congratulate them on their good balance but 6bn isnt alot for an entire country, this is about €350 per person excluding any money owed elsewhere. They got something solid in the pocket change there so its something but not very much. Norway is one of the few exceptions to the rule and stored €70,000 per citizen in a sovereign wealth fund, they had the good luck of alot of off shore oil and I'm not sure how much is gold if any but they got more sense then most countries have exercised. I'd hope alot of banks, countries are accumulating reserves of this sort where value cannot half if economic recession occurs, solid long term value. We mostly store vast amounts of debt now which is a very unknown future value combined with a fixed nominal value relying on politics, the certainty being alot of the value evaporates over time and thus the debt helps government overspend every year on the fiscal budgets. The consideration of commercial banks for stress test apparently does not consider excessive inflation, it does not recognise we may have overproduced currency and debt obligations near term and this will result in prices becoming far greater in future. Its likely most banks would suffer badly and be badly backed by actual asset value, its hard to say as the debt would be worth less also. Dont store money in one thing and obviously not just one bank, but hopefully people would have their accommodation paid and money not invested or reliant on just one economy. If national currency falls in value then some foreign income is a good hedge. https://us.cnn.com/2019/10/25/politics/trump-us-budget-deficit-2019/index.html Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Pearls Before Swine on October 25, 2019, 10:10:16 PM It should be mentioned that even china's largest and most prosperous banks are facing great difficulties atm. 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. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: panganib999 on October 25, 2019, 11:31:14 PM I have experienced this situation where a lot of banks got liquidated in 1998 in Indonesia. Yeah, it was a mess, but from a business perspective, it's the way of removing unprofitable banks. The problem with this issue in the present day however, the Government of Indonesia now will "bailout" the users' saving account up to 2 billion IDR (about 142K USD) per person. 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.If that happens, guess how the government will pay? By printing more money from thin air, or in other words, debasing the currency. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Hydrogen on October 26, 2019, 06:01:14 AM All banks are inherently weak during a recession 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. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: teosanru on October 26, 2019, 06:19:29 AM Quote More than half of the world’s banks are already in a weak position before any downturn that may be coming, according to a report from consultancy McKinsey & Co. A majority of banks globally may not be economically viable because their returns on equity aren’t keeping pace with costs, McKinsey said in its annual review of the industry released Monday. It urged firms to take steps such as developing technology, farming out operations and bulking up through mergers ahead of a potential economic slowdown. “We believe we’re in the late economic cycle and banks need to make bold moves now because they are not in great shape,” Kausik Rajgopal, a senior partner at McKinsey, said in an interview. “In the late cycle, nobody can afford to rest on their laurels.” The decade since the global financial crisis has seen a wave of innovation in financial services, bringing new competitors from fintech startups to giants like Apple Inc. and Alphabet Inc.’s Google. Banks have pondered whether to compete with, partner with or acquire some of these newcomers. Some established firms have sought to rebrand as technology companies, in part to attract hard-to-get talent. McKinsey, whose clients are some of the biggest corporations in the world, consults on topics ranging from strategy and technology to mergers and acquisitions, outsourcing and stock offerings. In its report, the firm said banks risk “becoming footnotes to history” as new entrants change consumer behavior. Most recent attempts by banks to boost efficiency have been “business-as-usual,” it said. Banks allocate just 35% of their information-technology budgets to innovation, while fintechs spend more than 70%, McKinsey said. Combined with regulatory factors lowering the barrier to entry -- like open banking and looser requirements for startups -- the environment is increasingly conducive for newer firms to take share from banks. The report points to Amazon.com Inc. in the U.S. and Ping An in China as examples of technology firms that are capturing financial-services customers. To make matters worse for the old guard, the new players tend to go after the business areas that create the highest returns at banks -- credit cards, for example. Investors have taken notice. Globally, banks’ valuations have fallen 15% to 20% since the start of last year, McKinsey said, adding that “the drop in valuation suggests that investors anticipate a sharp deceleration in earnings growth.” Lenders can cut costs and find funds for technology by outsourcing what McKinsey calls “non-differentiating activities,” including some trading and compliance functions. Banks “need to get much more comfortable with external partnerships and being able to leverage talent externally,” Rajgopal said. Read more: BofA’s cloud expansion could ‘save a ton of money’ Another way to free up money: get bigger. BB&T Corp. and SunTrust Banks Inc. said as much when they announced their decision to combine earlier this year -- the biggest U.S. bank merger since the financial crisis. Rajgopal said he expects M&A to continue in the late cycle. “Going forward, scale will likely matter even more as banks head into an arms race on technology,” the report says. https://www.bloomberg.com/news/articles/2019-10-21/banks-must-act-now-or-risk-becoming-a-footnote-mckinsey-says .... This may not be a good time to have money stored in banks, if indeed more than 50% of them are weakened and may not survive an economic downturn. :) It should be mentioned that even china's largest and most prosperous banks are facing great difficulties atm. These negative trends relating to banks are not isolated events. Rather they are becoming normalized and widespread throughout the industry. Excitement and risk have a tendency to be correlated. Whether in gambling or investment markets, where one is found it is common to find the other. With many banks engaged in leveraged investments tied to global economies, upticks may produce profits, while a turn in the opposite direction can carry devastating effects. Hopefully we won't ever have another 2008 bank crisis. :( Even though everyone seems to be shouting exactly such a thing will happen inevitably from the mountain tops. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: mu_enrico on October 26, 2019, 05:29:29 PM 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. Bitcoin is irrelevant since its users only accounted for less than 0.1% of the global population, its often criticized by Nouriel Roubini that saidQuote the number of active bitcoin users is only between 2.9 and 5.9 million https://www.banking.senate.gov/imo/media/doc/Roubini%20Testimony%2010-11-18.pdfIn 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. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Leonardo7 on October 26, 2019, 06:16:11 PM 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.
Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: dothebeats on October 26, 2019, 06:34:19 PM A recession occurs because of mismanagement, boom and bust cycle, geopolitical instability, etc., not because of 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. The real problem is where we go with our money, and no one seems to have a proper answer to that question. One could say that buying Bitcoin or Gold is a good option, or real estate, but even when doing that, there will always be a significant part of our worth stored in bank accounts because a bank is still the best place to actually store our money. 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. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Periodik on October 27, 2019, 02:50:03 AM A recession occurs because of mismanagement, boom and bust cycle, geopolitical instability, etc., not because of 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. 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. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: CryptoBry on October 27, 2019, 03:54:48 AM Hopefully we won't ever have another 2008 bank crisis. :( Even though everyone seems to be shouting exactly such a thing will happen inevitably from the mountain tops. 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. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Strongkored on October 27, 2019, 11:54:24 AM Hopefully we won't ever have another 2008 bank crisis. :( Even though everyone seems to be shouting exactly such a thing will happen inevitably from the mountain tops. 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.Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: SummerBliss on October 27, 2019, 12:46:04 PM 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.
Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: alyssa85 on October 27, 2019, 01:31:01 PM Quote More than half of the world’s banks are already in a weak position before any downturn that may be coming, according to a report from consultancy McKinsey & Co. A majority of banks globally may not be economically viable because their returns on equity aren’t keeping pace with costs, McKinsey said in its annual review of the industry released Monday. It urged firms to take steps such as developing technology, farming out operations and bulking up through mergers ahead of a potential economic slowdown. Most of these banks are in the eurozone. Germany for example has at least a dozen very weak banks. They can't make a profit thanks to the eurozone's negative interest rates. Negative interest rates are at their lowest in the eurozone and in Denmark at -0.5% an. In Japan it's -0.1%. If your country has positive interest rates, the banks are likely safe and profitable. It's the negative interest rate zones that are a problem. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: V1saya on October 27, 2019, 01:43:06 PM 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.
Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: djsugar on October 27, 2019, 01:56:18 PM 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.
Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Theb on October 27, 2019, 02:14:53 PM 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. 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. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: eaLiTy on October 27, 2019, 03:34:45 PM 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. 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. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: yoseph on October 27, 2019, 06:34:50 PM 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.
Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: STT on October 27, 2019, 06:50:15 PM Quote Hopefully we won't ever have another 2008 bank crisis. 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. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: sikke on October 27, 2019, 07:20:22 PM 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. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Mometaskers on October 27, 2019, 08:38:54 PM 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.
This may not be a good time to have money stored in banks, if indeed more than 50% of them are weakened and may not survive an economic downturn. The real problem is where we go with our money, and no one seems to have a proper answer to that question. One could say that buying Bitcoin or Gold is a good option, or real estate, but even when doing that, there will always be a significant part of our worth stored in bank accounts because a bank is still the best place to actually store our money.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? Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: gantez on October 27, 2019, 08:42:20 PM I have experienced this situation where a lot of banks got liquidated in 1998 in Indonesia. Yeah, it was a mess, but from a business perspective, it's the way of removing unprofitable banks. The problem with this issue in the present day however, the Government of Indonesia now will "bailout" the users' saving account up to 2 billion IDR (about 142K USD) per person. If that happens, guess how the government will pay? By printing more money from thin air, or in other words, debasing the currency. Lately or like 7 years ago, some countries started the merger system. Here, the weak bank is joined with the bigger bank and operation continues. I think this is better than pushing money to banks inform of bailouts. If monies are pushed that way without proper monitoring and checkmating by regulating agencies, it will lead to too much money in circulation which can lead to inflation. So, it is the responsibility of the government to monitor banks to see weaker ones to be merged or bought over. That should be the first step instead of printing more money into circulation. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: mu_enrico on October 28, 2019, 11:49:08 AM 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. That's correct. I was explaining the "economic cycle" and what could cause a recession in the "economic cycle."So, what caused economic crisis 1998 in SEA and financial crisis 2008 in Europe & the US? It's not a mere "economic cycle" isn't it? So, it is the responsibility of the government to monitor banks to see weaker ones to be merged or bought over. That should be the first step instead of printing more money into circulation. Banks failure should not be the burden of government. Let the unprofitable die or naturally merged with a "hands-off" policy. If the government starts to take part in the market, the market becomes inefficient. Banks will be overly risk-taker because they know that in the face of bankruptcy, the government will save them.Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: 1Referee on October 28, 2019, 01:44:23 PM Most probably I won't be storing my money in the banks, not during this expected collapse. The problem I see here is that while so many people expect a collapse/recession to happen very soon, it might not happen for at least another 5 or so years. Perhaps even longer. I find the US stock market to be an exceptional collapse/recession indicator, because it shows what smart money thinks about the market and economy. Some of the biggest names in the tech industry such as Microsoft and Apple have reached new all time highs today, and some others are just a few percent away from doing so. I will start to worry when we see the US stock market breaks below its bull trend that it has respected for so many years. Every dip is currently bought up because that's seen as a fantastic entry point, and thus far dip buyers did well. 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. That's why people should hold some decent amount of cash at home hidden safely, enough to last them a couple of months at least. I'm just curious, do you stay within the government-insured limit of deposit? I do, but more so because I don't have enough in any of my bank accounts to exceed their threshold. I however wouldn't really pay too much attention to that because when you make the rules, you can break them too, which we have seen happen in various countries already. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Mometaskers on November 01, 2019, 12:18:51 PM I'm just curious, do you stay within the government-insured limit of deposit? I do, but more so because I don't have enough in any of my bank accounts to exceed their threshold. I however wouldn't really pay too much attention to that because when you make the rules, you can break them too, which we have seen happen in various countries already. Never seen the government not pay the insurance in my country since there haven't really been a lot of bank to collapse but you do have the right approach. Have to be cautious with these. Especially if it's a large bank, the gov't can simply say they can't afford to pay all the depositors in one go. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: huu78 on November 03, 2019, 12:38:17 AM I hope that the economic crisis is a fear for ourselves where the currency does not mean for us all.
But they are based on the country they do. If doing a good one then it will be able to survive the recession. If the country's many problems could allow the currency to be impacted by it and it would be good before the save in the cryptocurrency would be better. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Flor1982 on November 03, 2019, 03:26:56 AM That is true and one way that some banks will survive is thru Bank company merging in which banks will just merged to one another. In merging they could minimize operation and labors cost while sharing their common depositors and investors in which this strategy works many times before that is why some of them did not bankrupt and keep on surviving.
Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: error08 on November 03, 2019, 03:54:42 AM The recession might not happen, Joseph Stiglitz said; "the world economy began a severe slowdown, but there will be no crisis."
If the world economic crisis will occur, it will be a good chance to eliminate 50% of the world's bank, let the weak falls and the stronger remain in the game. Furthermore, the global recession will be a good test for bitcoin, whether it will hold on, rise or fall. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Kyraishi on November 03, 2019, 04:39:18 AM Yikes, that some scary stuff, I was always under the impression that banks were a lot more prepared and able to survive an attack like this, guess I am mistaken then.
I'm personally keeping a very minimal amount in the bank, most of the funds are either going into a cash spot I have, or paying off mortgages, or spent. Can't say I have more than 5,000 in my bank account at all times, the economy is really unstable so far and I like preparing for the worst. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Vishnu.Reang on November 03, 2019, 05:01:04 AM It is not going to worry the bankers. The tax payers will bail them out, just like the case during 2008-09. The amount mentioned in the bank bailout bill (Emergency Economic Stabilization Act of 2008) was around $700 billion, but as per reliable sources the total cost for the treasury was much higher than that. And one year later, the bankers were going to Maldives and Seychelles for their holidays, as usual.
Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Hydrogen on March 25, 2020, 01:40:16 AM Bumping this.
As it could be relevent now. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: nosferzd on April 02, 2020, 05:40:09 AM That is why if you want to keep your money in banks, you need to choose from the list of the top 10 largest banks, or invest the amount that insurance agencies can return to you in case of bank bankruptcy. You can also distribute your funds to different banks and be sure that everything will be reimbursed to you also with interest.
Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: senin on April 02, 2020, 06:18:16 AM A recession occurs because of mismanagement, boom and bust cycle, geopolitical instability, etc., not because of 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. 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. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: mu_enrico on April 02, 2020, 12:03:50 PM However, now we have the opportunity to observe for the first time how Bitcoin and other decentralized cryptocurrencies will behave when the global economic crisis sets in. It is assumed that Bitcoin appeared after the previous economic crisis of 2008 as an alternative to existing traditional payment systems, namely, as an inflation-free currency. It seems to me that we cannot avoid a very tough economic crisis, and therefore we will have such an opportunity. Yes, this is an opportunity for Bitcoin to prove to the masses that it can survive the crisis. However, I don't think that the price will increase, more likely follows any other investment instruments, like gold, stocks, etc.The government will bail out banks if they face bankruptcy, but what will happen to Bitcoin? What will happen to the miners? Maybe we can answer these questions this year. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Meowth05 on April 04, 2020, 04:37:00 AM People shouldn't panic when that happen, deposits of each individual are insured no matter what happens when they are in the bank. I don't see a problem when it happen to big banks but if you are with them and you are on the small banks then just make sure that the bank you are inare covering your savings with insurance.
Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: fiulpro on April 04, 2020, 07:40:04 AM I don't even think it would be 50% , it is way way more than that for sure , it is dependent on the place where they are situated. If they are more localised around a developing country and are local banks , not national then they have the worse case scenario , I have seen people loosing money , with the banks being torn down and trust me it wasn't even a recession . It was just any normal turn of events which the less flexible banks couldn't afford to take care of.
Banks are weak , the government is weak , we have to be independent for a while , till the time they find out how to use authority and intelligence together. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: figmentofmyass on April 04, 2020, 11:04:50 AM Bumping this. As it could be relevent now. this is the first USA bank failure since the coronavirus hit: https://www.marketwatch.com/story/fdic-announces-first-bank-failure-of-coronavirus-crisis-2020-04-03 are the first dominos beginning to fall? we should expect an uptick in bank failures as the crisis pushes banks who were already financially stressed over the edge. this may not indicate larger systemic issues though. FDIC data shows that banks overall were well capitalized heading into the pandemic. months of lockdowns could change that outlook though as people start defaulting on loans. https://www.americanbanker.com/news/will-coronavirus-lead-to-a-wave-of-bank-failures Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: abhiseshakana on April 11, 2020, 07:56:05 AM Given the fact that large companies such as Apple, Amazon, Ping An have begun to provide financial services, and their credit cards are especially in demand, then in this case, bad times really come for banks. According to competent analysts, in order for the banking system to remain operational and many banks to survive after the next economic crisis, banks will have to introduce new technologies, as well as use outsourcing and large-scale mergers with other banks and structures. Otherwise, such banks simply run the risk of disappearing. Nowadays banking is considered the key to economic success so that banks are imaged as important for developing the economy even though what is key to the economy is banking, not banks. But because there is already a doctrine, so entrepreneurs and academics see the bank as the most important and must be protected. Whereas the bank was designed only for the rich because those who can borrow at the bank are those who have collateral (asset-based loan), even though the bank collects funds from most people but the allocation is only for a group of people. Banks are a sunset business because now banking can be done by non-bank institutions such as Paypal and many financial services that were initially provided by banks are now provided by many digital platforms. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Wind_FURY on April 11, 2020, 08:07:44 AM That is why if you want to keep your money in banks, you need to choose from the list of the top 10 largest banks, or invest the amount that insurance agencies can return to you in case of bank bankruptcy. You can also distribute your funds to different banks and be sure that everything will be reimbursed to you also with interest. "Not your bills, not your cash". 8) You should save/invest/HODL some of your net-worth in Bitcoin, then convert your money back to fiat if that's what you truly want. Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Rafael_Carrero on April 11, 2020, 11:22:11 AM Some Banks' bankruptcy is inevitable event. People can't trust banks as they do before 2008 crisis. Don't forget that the situation has changed since 2009 a lot. Now cryptocurrency gives us financial freedom. We appreciate the concept of being our own bank, so banks are becoming weaker.
Title: Re: Report: More Than 50% of the Worlds Banks May Be Too Weak To Survive A Recession Post by: Hydrogen on March 18, 2023, 09:08:53 PM Bumping this. As it could be relevent now. Bumping this again, as it could be somewhat relevant given the recent collapse of SVB. |
