It has been just revealed the fact that there is a second wave of banking crisis incoming, and it will be reminiscent of the 2008 global financial recession. Check out the latest reports about this below.
Second wave of banking crisis
According to macroeconomic specialist George Gammon, there may be another wave of bank failures looming.
In a recent video update to his 480,000 YouTube followers, Gammon highlights the significant increase in bank borrowing from America’s Federal Home Loan Bank (FHLB) system and the newly established Bank Term Funding Program (BTFP) as strong indicators that suggest more banking failures could be imminent.
“When these troubled banks need liquidity, their first option, because it’s way cheaper, is going to be the marketplace. The repo market as an example.”
The notes continued and stated the following:
“But they’re very sophisticated lenders… so [banks] go to their next best option, which would be the FHLB, but they really hesitate to do that because although it’s this stealth bailout it is very expensive and the terms quite often are very draconian…”
More than that:
“But then let’s say you’re so bad that [the FHLB doesn’t] even want to do business with you, what do you do? Well before you wave the white flag, you’ve got to go right down here and go to the ultimate lender of last resort, and that would be the Federal Reserve. You’d try to access a facility such as this new BTFP.”
According to Gammon, the Federal Reserve Economic Data (FRED) system’s latest statistics reveal significant and continuous increases in borrowing from both FHLB and BTFP, indicating that the banking crisis persists.
“We know that the banking crisis is far from over because of the chart of the advances of the FHLB is still extremely high and going even higher. We can also combine this with the BTFP being extremely high and it hasn’t come down yet.”
