{"id":24683,"date":"2023-03-14T18:32:41","date_gmt":"2023-03-14T23:32:41","guid":{"rendered":"https:\/\/pdv-a.com\/?p=24683"},"modified":"2023-03-15T16:49:25","modified_gmt":"2023-03-15T21:49:25","slug":"fed-fantasma-de-una-crisis-financiera","status":"publish","type":"post","link":"https:\/\/pdv-a.com\/en\/2023\/fed-fantasma-de-una-crisis-financiera\/","title":{"rendered":"The Fed and the specter of a financial crisis"},"content":{"rendered":"<ul>\n<li>\n<h5>Historically, the Fed's tightening cycles often end up in bankruptcies or financial crises,<\/h5>\n<\/li>\n<li>\n<h5>Raising doubts about whether there will be something else \"breaking\" after the fall of SVB.<\/h5>\n<\/li>\n<li>\n<h5>The credit will shrink as a result of what happened.<\/h5>\n<\/li>\n<li>\n<h5>Fear of SVB has caused sovereign bonds to gain up to 3% in three days.<\/h5>\n<\/li>\n<li>\n<h5>SVB's intervention puts fintechs and their regulation in the spotlight. Meanwhile<\/h5>\n<\/li>\n<li>\n<h5>Big tech companies like Paypal, Adien, or SoFi are skyrocketing on the stock market.<\/h5>\n<\/li>\n<\/ul>\n<p>A year ago, the Federal Reserve began raising interest rates, and the SVB bankruptcy has become the first sign of how rate hikes can affect the economy. Historically, every time the Fed starts a rate hike cycle, something happens, and it is not always positive. Nevertheless, the financial system has control mechanisms and capital cushions that reduce financial risk and increase the likelihood of negative effects being minor. However, the SVB bankruptcy is causing a reassessment of the Fed's next moves.<\/p>\n<p>Despite the fact that the economy was showing remarkable behavior with companies with higher-than-expected earnings and profitability levels and a low level of loan defaults, the deposit flight and banking panic suffered by SVB demonstrate that economic policy and financial regulation have been inadequate. The Fed has the difficult task of combating inflation while shoring up financial instability.<\/p>\n<p>According to the Federal Reserve Chairman Jerome Powell's speech to Congress, the financial situation of US banks seemed solid. However, the SVB bankruptcy has cast doubt on his statement. The Fed has broken many things in its history, and today, with new technologies, its movements spread rapidly. It is time for our policy formulation and regulation framework to respond.<\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-24682 aligncenter\" src=\"https:\/\/pdv-a.com\/wp-content\/uploads\/2023\/03\/FED.jpg\" alt=\"Crisis financiera\" width=\"866\" height=\"660\" srcset=\"https:\/\/pdv-a.com\/wp-content\/uploads\/2023\/03\/FED-16x12.jpg 16w, https:\/\/pdv-a.com\/wp-content\/uploads\/2023\/03\/FED-200x152.jpg 200w, https:\/\/pdv-a.com\/wp-content\/uploads\/2023\/03\/FED-300x229.jpg 300w, https:\/\/pdv-a.com\/wp-content\/uploads\/2023\/03\/FED-400x305.jpg 400w, https:\/\/pdv-a.com\/wp-content\/uploads\/2023\/03\/FED-600x457.jpg 600w, https:\/\/pdv-a.com\/wp-content\/uploads\/2023\/03\/FED-768x585.jpg 768w, https:\/\/pdv-a.com\/wp-content\/uploads\/2023\/03\/FED-800x610.jpg 800w, https:\/\/pdv-a.com\/wp-content\/uploads\/2023\/03\/FED.jpg 866w\" sizes=\"(max-width: 866px) 100vw, 866px\" \/><\/p>\n<p>&nbsp;<\/p>\n<p>The chart shows that most Fed rate hike cycles end up with something breaking in the financial system, from the 1929 stock market crash to bankruptcies, the 1987 Wall Street Black Monday, and the subprime mortgage crisis in 2007, a prelude to the global financial crisis. The Fed has an uncomfortable position, as it must combat inflation and, at the same time, shore up financial instability.<\/p>\n<p>Hasta la semana pasada, aparte de una fuerte desaceleraci\u00f3n en el sector inmobiliario, la econom\u00eda y el sistema financiero hab\u00edan mostrado pocos efectos secundarios evidentes de la agresiva campa\u00f1a de la Fed para subir las tasas durante el a\u00f1o pasado. Ahora, sin embargo, se empiezan a ver las costuras. \u00abSiempre hemos dicho que lo \u00fanico que podr\u00eda descarrilar el endurecimiento de la Fed ser\u00eda una crisis financiera.<\/p>\n<p>No est\u00e1 claro si se ha evitado una crisis todav\u00eda\u00bb. En esta fase del ciclo de tipos de inter\u00e9s, algunos bancos se ver\u00e1n sometidos a presiones, y la Fed debe aceptarlo. La Fed ha subido las tasas de cero a cerca del 5%, lo que implica una mayor sensibilidad a las subidas si se parte de tipos cero (pensemos en la duraci\u00f3n). Si algunos balances se ven erosionados por una reducci\u00f3n de las valoraciones del mercado y se convierten en una monstruosidad, antes de que nos demos cuenta, habr\u00e1 que hacer frente a una situaci\u00f3n de crisis.<\/p>\n<ul>\n<li>\n<h6>In summary, the Federal Reserve's interest rate hikes in the United States are having effects on the economy, as demonstrated by the Silicon Valley Bank's bankruptcy. Although the financial system has control mechanisms to reduce financial risk, the financial situation of US banks does not seem solid. The Fed has the difficult task of combating inflation and shoring up financial instability.<\/h6>\n<\/li>\n<li>\n<h6>Most Fed rate hike cycles end up with something breaking in the financial system, from the 1929 stock market crash to the global financial crisis.<\/h6>\n<\/li>\n<li>\n<h6>At this stage of the interest rate cycle, some banks will come under pressure, and the Fed must accept it.<\/h6>\n<\/li>\n<\/ul>\n<h6><\/h6>\n<p><strong><a href=\"https:\/\/pdv-a.com\/en\/\">For corporate finance advisory services, please contact PDV-a.com.<\/a><\/strong><\/p>\n<h3><strong>References<\/strong><\/h3>\n<p><span style=\"color: #ff6600;\"><strong><a style=\"color: #ff6600;\" href=\"https:\/\/www.federalreserve.gov\/aboutthefed.htm\" target=\"_blank\" rel=\"noopener\">The Federal Reserve System is the central bank of the United States |\u00a0<\/a><a style=\"color: #ff6600;\" href=\"https:\/\/www.svb.com\/\" target=\"_blank\" rel=\"noopener\">SBV: Silicon Valley Bank |\u00a0<\/a><a style=\"color: #ff6600;\" href=\"https:\/\/akademiun.com\/\" target=\"_blank\" rel=\"noopener\">Gesti\u00f3n de contenidos |<\/a>\u00a0<a style=\"color: #ff6600;\" href=\"http:\/\/www.avacum.com\/\" target=\"_blank\" rel=\"noopener\">Online  Business Valuation<\/a><\/strong><\/span><\/p>","protected":false},"excerpt":{"rendered":"<p>The increase in interest rates by the Federal Reserve in the United States is having effects on the economy, as demonstrated by the bankruptcy of Silicon Valley Bank. Although the financial system has control mechanisms to reduce financial risk, the financial situation of US banks does not appear to be solid. The Fed has the difficult task of combating inflation and shoring up financial instability. Most of the Fed's tightening cycles have ended with something breaking in the financial system, from the crash of '29 to the global financial crisis. In this phase of the interest rate cycle, some banks will face pressures, and the Fed must accept it.<\/p>","protected":false},"author":3,"featured_media":24687,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"_joinchat":[],"footnotes":""},"categories":[172],"tags":[171,630,597,631],"class_list":["post-24683","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-noticias","tag-economia","tag-inversiones","tag-mercados-financieros","tag-riesgos-financieros"],"_links":{"self":[{"href":"https:\/\/pdv-a.com\/en\/wp-json\/wp\/v2\/posts\/24683"}],"collection":[{"href":"https:\/\/pdv-a.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pdv-a.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pdv-a.com\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/pdv-a.com\/en\/wp-json\/wp\/v2\/comments?post=24683"}],"version-history":[{"count":8,"href":"https:\/\/pdv-a.com\/en\/wp-json\/wp\/v2\/posts\/24683\/revisions"}],"predecessor-version":[{"id":24743,"href":"https:\/\/pdv-a.com\/en\/wp-json\/wp\/v2\/posts\/24683\/revisions\/24743"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/pdv-a.com\/en\/wp-json\/wp\/v2\/media\/24687"}],"wp:attachment":[{"href":"https:\/\/pdv-a.com\/en\/wp-json\/wp\/v2\/media?parent=24683"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pdv-a.com\/en\/wp-json\/wp\/v2\/categories?post=24683"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pdv-a.com\/en\/wp-json\/wp\/v2\/tags?post=24683"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}