The danger is still present Economic newspaper

Anxiety and clouds still hang over the US and global banking scene at the same time, despite the recent intervention of the US and Swiss authorities to save a number of banks that faced sudden difficulties that led to their collapse. It is clear that the state of anxiety will continue in the coming period, with the possibility of some small and medium-sized banks faltering, while voices are rising calling for maintaining the momentum of government intervention to protect depositors’ money, and maintaining direct control of the conditions of some banks, especially those that have recently suffered problems caused by The burdens of rising interest, to counter inflation, as well as the increase in deposit withdrawals by their owners, for fear that matters will reach a level that they cannot maintain, as happened in the aftermath of the 2008 global economic crisis, which began practically as a pure banking crisis.
The problem of the flight of deposits is putting strong pressure on the banking sector, which has witnessed sharp declines in the past days in the American, European and British markets. But no one can keep these deposits in the bank’s coffers, if the state of anxiety is mounting at the present time. Janet Yellen, US Treasury Secretary, is moving towards achieving only one goal now, which is to keep the diseases of troubled banks within their scope, that is, not to spread the infection to other banks, and thus spread to the banking system. This matter is not easy to achieve, and it requires time, and perhaps new regulatory legislation that is more powerful than those imposed on banks due to the aforementioned global crisis. It is true that those restrictions were strong, but it is also true that they have not been revised since then, with the emergence of an atmosphere of permissiveness, which (as is known) led to the 2008 crisis.
It seems clear that the US financial official acknowledged the existence of regulatory loopholes, which prompted her to stress the importance of confronting the control system.
She believes that there is a state of stability in the banking sector after the crisis of US banks and Credit Suisse, especially since withdrawals from US regional banks are stable. However, in the past hours, medium-sized US banks called on the government to protect depositors’ money, which reinforces the belief that the banking situation is still in a critical condition, despite the government’s control of the situation so far. In the aftermath of the recent US banking crises, the rate of withdrawal of deposits from small and medium-sized banks rose strongly, and the majority of them were deposited in large banks. This is causing more tension in the banking sector at the present time, with the need to point out that the most important element of all in this sector is trust.
Hence, the responsibility of financial legislators in the United States is currently focused on restoring this confidence, and working to put in place swift laws that ultimately guarantee stable and reliable banking performance in the future. But this is not easy to achieve with the clear public opposition of the Republican Party to any comprehensive federal guarantee for bank deposits in excess of the current limit of $250,000. This will impede, in one way or another, the current move by lawmakers to set limits for deposit withdrawals, while high interest rates are still increasing pressure on the banking sector in general, and it does not seem that it will recede, at least this year.
There is no doubt that government agencies have achieved some successes in facing the crises of troubled banks recently, including the “cooperation” of US banks in pumping deposits to cover the gaps resulting from the increasing withdrawals. But if things get out of control, no one can guarantee that the banking arena will move away from the circle of imminent danger, which could explode at any moment.