The state banks are facing a liquidity crisis in reverse (Photo: Cubano Periodicals)
An unfortunate situation would affect the banks of the United States. When there is an economic recession, the crisis that is generating impulses to the banks in the capitulation of funds, in order to get rid of them in a context that results in a proposal for this business. Due to the situation provoked by the coronavirus has been different, there was a crisis of liquidity in the inversion in EEUU.
The essence of this is that state banks have a lot of money that money can benefit from. One of the principal intentions of the banks to attract radical money in which they can concede prestige, and obtain an interest. But this change has drastically decreased during the last year.
The reasons are various and have converged all over the world, exacerbating the problem for the banks: the requirements of capital approved in the wake of the 2008 crisis, the economic instability in the wake of the pandemic, and the government’s policy to enforce the economic consequences of coronavirus.
With the final decision to motivate the activity and movement of the money, the Federal Reserve has maintained the types of interest rates since March, which it has benefited from the population, but has affected the financials of the financial entities.
But including the fact that the interest is permanent, the banks do not have many opportunities to move their money through loans and credits, since the request has been approved.
The prolonged extension of the pandemic and the consequent economic insecurity, which can be alarmed for much longer, have generated reserves in the population. Many people have the courage to oppose deeds without sabers when they pay homage. The persons he avocado more than before the austerity and the ahorro, by the time it takes to get past mana.
“The people are literally stealing dollars in the banks”, assured BBC Mundo Nathan Stovall, expert in the financial system of United States of S&P Global.
In the foregoing is the package of estimates approved by the governor, which includes vouchers issued by entities and direct payments to families and businesses. This is a step in the right direction for the economy to be trusted, and it has allowed people without the urgency to apply for financial aid to the banks.
Lots of money, little moving
Bank loans are handed over to its customers who transfer part of their money to another entity (Foto: Periódico Cubano)
Financial entities such as JPMorgan, Bank of America and Citigroup, he says he does not want to receive more money from his customers, he will increase more than a trillion dollars in deposits in 2020 and the ratio of deposits to deposit to historical minimums, up to about 60%.
In declarations to BBC Mundo, Jamie Dimon, executive director of JPMorgan, said that this historic investment firm solicits a variety of companies that have more funds deposited, that the transfer to other entities, has reduced its deposit base to 200,000 million dollars.
“The mayors of the country are dinosaurs, have the point that some of them have been forced to return deposits and we will see that others will try to do the same,” said Nathan Stovall in the English press.
The banks alone have the most difficulties in repaying the deposits, so that they increase the demand to increase the capital with which they are obliged to pay. In this context, it is unfavorable, executives of the sector are relying on the authorities that relay the requirements.
According to JP Morgan’s CFO, Jennifer Piepszak, who’s in trouble is not the vitality of the financial system, anyone who thinks it’s strong will be able to obtain financial contributions.
“The security of the system is a priority for the governor, which is what the bank wants and it is in terms of conceding credits to activate the economy, and, by the way, the bank is willing to do it,” he assured.
How affected are customers?
“Some banks can only find other places, but they will always have the right to collect the funds,” Stovall explained.
The main consequence for customers has been debated since months: those who have their deposits deposited in the banks, are receiving a profit that is zero for them. The experts do not believe that this situation will change immediately.
Stovall said that “this situation could lead to many small borrowers looking for products and investments of major risk”, as it appears to add to the high volatility contribution, such as bitcoin.