Associate Professor of Moscow State University estimated the largest bank failure in the USA since 2008

One of the Silicon Valley banks in the United States has been declared bankrupt, the largest bankruptcy since the global financial crisis in 2008. About what such an incident threatens the financial sector, in an interview “Izvestia” said Maxim Chirkov, Associate Professor of the Department of Political Economy of the Faculty of Economics of Moscow State University.

First of all, the expert explained that the collapse of the bank itself cannot serve as a trigger for the start of the mass bankruptcy of all US financial institutions. In addition, Silicon Valley Bank had a rather specific profile for investments – start-ups and other extremely risky investments.

“This is a one-time bankruptcy. On the other hand, the problems associated with the financial sector of the United States will increase. Servicing loans for banks becomes very expensive. In addition, the increase in interest rates makes the assets of banks less valuable. Bonds, which are in the assets of many US banks are becoming much cheaper. This creates big problems”Chirkov said.

According to an associate professor at Moscow State University, many other Western financial institutions will also go bankrupt in 2023.

Previously journalists REN TV explained the dangers of such incidents in the financial sector.