კონფერენცია

∘ Malkhaz Chikobava ∘
THE MODERN BANKING CRISIS AS A HARBINGER OF THE END OF THE ERA OF COMMERCIAL BANKS

Abstract

The article examines the reasons for the bankruptcy of a number of US commercial banks (Silicon Valley Bank, Signature Bank, Silvergate Bank) in March 2023 and the possibility of an expected wave of a general banking crisis.

Talk about the impending danger of a financial crisis began after the Federal Reserve began to tighten monetary policy in March last year, citing the need to contain record high inflation rates.

It should be noted that such a policy has been severely criticized. First, because loans will become inaccessible and expensive for companies in the non-financial sector of the economy. Secondly, because many banks will begin to depreciate their own assets. The assets of aki-banks have been formed in recent years at the expense of treasury and mortgage-backed securities at very low interest rates (low, because the key rate of the US Federal Reserve was close to zero). When the Fed began to sharply raise its key rate last year (now it is 5.25%), long-term securities (especially Treasury bonds) in the assets of banks, insurance companies and mutual funds began to depreciate. All this in March of this year led to the bankruptcy of the following American banks: Silicon Valley Bank, Signature Bank, Silvergate Bank, which raises serious doubts about the prosperous future of commercial banks in general.

Everything that the US monetary authorities have done over the past fifteen years cannot be called a solution to the problems. Monetary and financial policy has been reduced to protracting the crisis, pushing it into the future. And here is the future. It can be accurately dated - March 10, 2023, when the SVB went bankrupt.

Key words: inflation, key rate, treasury bonds, deposit insurance, banking crisis, commercial banks, gold standard, partial coverage of obligations.

Ivane Javakhishvili Tbilisi State University Paata Gugushvili Institute of Economics International Scientific C O N F E R E N C E S "ECONOMY – XXI CENTURY"

E ISSN 2587 - 4691	∘ Malkhaz Chikobava ∘ THE MODERN BANKING CRISIS AS A HARBINGER OF THE END OF THE ERA OF COMMERCIAL BANKS Abstract The article examines the reasons for the bankruptcy of a number of US commercial banks (Silicon Valley Bank, Signature Bank, Silvergate Bank) in March 2023 and the possibility of an expected wave of a general banking crisis. Talk about the impending danger of a financial crisis began after the Federal Reserve began to tighten monetary policy in March last year, citing the need to contain record high inflation rates. It should be noted that such a policy has been severely criticized. First, because loans will become inaccessible and expensive for companies in the non-financial sector of the economy. Secondly, because many banks will begin to depreciate their own assets. The assets of aki-banks have been formed in recent years at the expense of treasury and mortgage-backed securities at very low interest rates (low, because the key rate of the US Federal Reserve was close to zero). When the Fed began to sharply raise its key rate last year (now it is 5.25%), long-term securities (especially Treasury bonds) in the assets of banks, insurance companies and mutual funds began to depreciate. All this in March of this year led to the bankruptcy of the following American banks: Silicon Valley Bank, Signature Bank, Silvergate Bank, which raises serious doubts about the prosperous future of commercial banks in general. Everything that the US monetary authorities have done over the past fifteen years cannot be called a solution to the problems. Monetary and financial policy has been reduced to protracting the crisis, pushing it into the future. And here is the future. It can be accurately dated - March 10, 2023, when the SVB went bankrupt. *Key words:* inflation, key rate, treasury bonds, deposit insurance, banking crisis, commercial banks, gold standard, partial coverage of obligations.