Soaring inflation eats into savings

Households reduce savings accumulated during the pandemic to sustain spending in the face of sharp price rises. The fall in the savings rate is reflected in the decline in household financial wealth.

 

While rising prices have been strangling families for months, the rise in central bank interest rates to try to curb inflation is pushing up mortgage prices, adding up to a perfect storm, forcing households to use the savings accumulated during the sanitary crisis to maintain the same level of consumption at much higher prices.

Data collected by the Bank of Spain and the National Statistics Institute (INE) suggest that households saved some 269 billion euros during the peak phases of the pandemic. Even so, the gradual reopening of the economy and the rising cost of living has caused a large part of these accumulated savings to evaporate.

The INE report shows that in the third quarter of 2022, the household savings rate stood at 5.7% of disposable income, the lowest figure in four years. It should be borne in mind that this rate is calculated by eliminating seasonal and calendar effects, due to the fact that savings tend to fall in the first and third quarters and rise in the other two. If we disregard these seasonal adjustments, the data show a negative savings rate of -3.2% compared with 6.4% in the same quarter of the previous year.

Less saving and less investment

Although the Bank of Spain has improved its GDP growth forecast by three-tenths of a percentage point to 1.6%, the forecast for private consumption falls by seven-tenths of a percentage point from 1.9% to 1.2%. On the one hand, the rise in the cost of living has ‘artificially’ increased consumption figures, but, on the other hand, the rise in interest rates and the reduction in the accumulated savings pool mean that the increase in household spending is expected to be weak. A slowdown in consumption could directly affect economic activity as it is a fundamental component of GDP.

Another consequence of the increase in spending and the reduction in savings capacity caused by inflation is reflected in a decrease in the household investment rate. The stock of household financial assets, whether in equity and investment fund (IF) holdings or a reduction in bank deposits, has been reduced by 53,431 million euros, or -2%, a fall not seen since the early 2020s.

In this context, the latest macroeconomic projections of the European Central Bank (ECB) indicate that although real household consumption is expected to recover gradually as the fall in real household income due to inflation and energy supply problems subside, the household saving rate will continue to fall this year to a level close to that recorded before the pandemic.

If you want to discover the best option to protect your savings, enter Preciosos 11Onze. We will help you buy at the best price the safe-haven asset par excellence: physical gold.

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The expansion of the fintech sector and the increasing integration of financial services into mobile apps and e-commerce are revolutionising the way we interact with our money outside traditional banking. But what exactly is embedded finance and why is it becoming so important?

 

Embedded finance is a model whereby non-banking companies integrate banking services and products directly into their virtual channels through mobile applications or e-commerce platforms. The aim is to allow customers to access financial products and services without having to leave the platform or application they are using, carrying out transactions where the contracting or purchasing process is easy and fast.

This is possible thanks to the use of technologies such as APIs (Application Programming Interfaces), a set of definitions and protocols that enable communication between two software applications and facilitate interconnection between financial services platforms and other sectors through mobile phones in an immediate and intuitive way. This saves time and money when setting up a business, without the need to create an application and all its services from scratch.

A typical case of the use of this technology is online payment, which has become an indispensable tool for consumers. For example, a fintech offering payment services could use an API to connect to an online banking platform so that its customers can transfer money directly from their bank account.

Similarly, e-commerce companies offer payments integrated into their platforms, so that customers do not need to leave the website to make a transaction. This is not only convenient for customers but also offers merchants the possibility to customise their services and improve their efficiency.

The fintech revolution

 

This technology is especially useful for fintechs that do not have the resources to develop their own banking products or that want to offer more accessible and personalised financial services to their customers, providing an alternative to the traditional banking model. Previously, customers had to visit a bank branch or cash point to access financial services, but now they have access through the platforms and apps they already use, reducing the need for travel, paperwork and waiting.

In addition, embedded finance has also enabled the creation of new business models. For example, e-commerce platforms can offer financing to their customers for their purchases, eliminating the need to use a traditional financial institution. This can help companies improve customer loyalty and increase sales

Embedded finance can also help improve financial inclusion. Many people do not have a bank account or are unable to access financial services for various reasons, such as poverty or lack of access to the banking system. Through embedded finance, these people can access basic financial services from a simple mobile device.

In short, the symbiosis between banks, technology providers and distributors of financial products has created an ecosystem that is transforming the sector, broadening the range of services on offer, fostering competitiveness and improving the customer experience with greater accessibility, convenience and flexibility.

 

11Onze is the community fintech of Catalonia. Open an account by downloading the super app El Canut for Android or iOS and join the revolution!

 

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Some concepts are fundamental to understand why we are on the brink of a recession, where the new world economic order is heading and who will be the major players. 

 

The Great Reset is the name of an initiative of the World Economic Forum that sought to rethink the capitalist economic model once the ravages of the pandemic had been overcome. The reality is that the health crisis has been compounded by a debt crisis and an inflationary crisis that have brought us to the brink of recession. 

In the current context, the “great reset of capitalism” called for by this international body is more necessary than ever. We review some key concepts to understand how we have reached a situation close to collapse and what factors will condition the economy’s near future. 

 

Asia

The axis of the global economy is shifting from Europe and the United States to Asia. According to a study  by the consulting firm McKinsey, by 2040 Asia will account for more than half of the world’s gross domestic product and 40% of consumption. Europe’s loss of prominence is evident and the IMF predicts that at least half of the eurozone countries will enter recession in the coming months.

 

Climate change

Global warming has forced us to move away from the idea of unlimited growth at the expense of depleting natural resources and has given way to the idea of the circular economy, with opportunities in the field of the “green” economy. As COP27 has shown, it now remains to be seen to what extent industrialised countries will bear the economic cost of the climate change they have generated and what measures they are prepared to take to slow down warming in the context of economic crisis.

 

Corporate power 

Large multinationals have growing power in the face of declining state influence. Many of these corporations oversee huge supply chains, sell their products around the world and have revenues exceeding those of many governments. In fact, if it were a country, Walmart would rank tenth in terms of revenue. Globalisation has reversed the balance of power and in many cases large corporations are allowed to avoid paying taxes with impunity.

 

Decentralisation

New technologies are enabling the emergence of products and services beyond the control of states and large corporations. As James Sène, chairman of 11Onze, pointed out in a session at Fintech Talks, we are facing a “transition from the old model, totally dominated by a few, to a new model that reaches more people and is decentralised”. Decentralisation of money creation, for example, has been one of the great pillars of cryptocurrencies.

 

Digital currencies

Faced with the advance of cryptocurrencies, which propose a totally decentralised monetary model, states are working against the clock to develop digital currencies controlled by central banks (CBDCs) in order to maintain a centralised financial system. In China, more than 260 million people have already used the digital yuan (e-CNY). In Europe, the European Commission expects the regulation on the digital euro to be ready by the beginning of 2023 and the digital currency to be operational by 2025. The initial aim is that the digital euro, managed and supervised by the European Central Bank, will not replace cash, but complement it.

 

Inequality

Data from the World Inequality Report 2022 show that since the mid-1990s, the richest 10 % of the world’s population has accumulated 76 % of the wealth generated in the world. In fact, 38% was concentrated in the hands of the top 1% of the world’s population. And the poorest half of the population has had to make do with the crumbs: barely 2% of the wealth generated during these last decades. Unfortunately, this gap between the super-rich and ordinary mortals has only widened during the pandemic. And experts agree that this growing inequality is a brake on global economic development.

 

Interest rates

After 11 years without an increase, the European Central Bank began raising interest rates in Europe in July. For the time being, they have already reached 2 % and the forecast is that they will continue to rise in the coming months to cool the economy even more and curb inflation. The ECB has aligned itself with the majority of the world’s central banks, which are also raising their interest rates to combat rising prices. This measure will directly impact the pockets of many citizens, as mortgage and variable-rate loans will become increasingly expensive.

 

Printing fiat currency

It is estimated that the total amount of money in circulation worldwide, including banknotes, coins, cheques and promissory notes, exceeds 60 trillion euros. The problem is that a considerable part of these banknotes have been put into circulation in recent years. For example, in 2020 alone, the US money supply increased by 24%. Most central banks have been printing money to cope with galloping public debt. And this increase in fiat currency has been mainly responsible for the current inflation.

 

Public debt

The world’s public debt has soared in recent years and is strangling economic growth. Although the limit set by the Maastricht Treaty for EU member states is 60 % of their GDP, the eurozone countries as a whole have been above 100 % for more than a year now, according to Eurostat data. The situation outside Europe is no better, with the International Monetary Fund estimating that, by the end of 2021, global public debt also represented 100 % of world GDP. Moreover, debt levels could worsen if the crisis deepens.

 

Stagflation

Since March 2021, prices have risen sharply and almost uninterruptedly. Inflation in Catalonia, which exceeded 10% year-on-year in the summer, was close to 7% in October. The situation beyond our borders is no better, as inflation in the euro area as a whole reached 10.7% in the same month. Successive interest rate hikes are expected to help control inflation levels not seen since the 1980s. The price to be paid will be further economic stagnation, leading to a recession in the major economies.

 

Subscription

As we pointed out in an article in La Plaça, a new mutual model is emerging, more communitarian and based on the sharing of goods and services, as an alternative to the model of individual purchase and use. In subscription business models, each customer pays fees that allow prolonged access to a good or service instead of making a large upfront payment to own that good or service. This business model is increasingly common in the computer, entertainment or automotive industries.

 

Virtuality

We do not live in a virtual world, but we do live in a virtualised world, since “what happens in the digital world has a real impact on our lives”, as James Sène warned in a session on the current economic situation. In this sense, the president of 11Onze predicted that the metaverse, whose economy depends on the authentication of digital properties, will play a key role in digitising our identities.

 

If you want your business to make a giant leap, use 11Onze Business. Our business and freelancer account is now available. Find out more!

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A vulture is a bird of prey that feeds mainly on carrion. A term that also serves as a statement of intent when it comes to defining a type of investment fund that acquires debt from companies or states on the verge of bankruptcy. Laura Bunyol, 11Onze agent, explains the origin of vulture funds and who is behind them.

 

Vulture funds are high-risk investment funds that aim to buy public and private debt securities of companies or countries whose solvency has been seriously compromised. Unlike the scavenger birds that give them their name, these funds do not perform an essential and beneficial sanitary task, quite the contrary, in fact, they have been labelled as modern usury and a threat to human rights.

Their business model is based on buying assets at the lowest possible price and, in the short or medium term, selling them to other investors for high returns. So far, it all seems a perfectly normal and logical investment concept. But from whom are these assets bought at such a good price? And who pays the consequences?

When malpractice is legal

As Bunyol explains, “in 2008 the state created the ‘bad bank, FROB, to absorb the banks’ deteriorated assets”, that is, the state bought the banks’ toxic assets with public money, and then sold them at a bargain price, between 20% and 30% of their nominal value, to the so-called vulture funds.

On the other hand, in the midst of the Spanish real estate crisis, vulture funds focused on buying up banks’ mortgage loans en masse. After pressuring debtors who could not assume the debt, these funds proceeded to denounce and subsequently initiate the foreclosure process.

A practice that was not always possible because many of these real estate assets were council flats that could not be converted. Therefore, the managers of these funds opted to change the rental contracts “to double the original price of the rents”, suffocating the tenants, says the 11Onze agent.

 

If you want to discover the best option to protect your savings, enter Preciosos 11Onze. We will help you buy at the best price the safe-haven asset par excellence: physical gold.

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The bailout deal following UBS’s purchase of Credit Suisse has caught AT1 bondholders by surprise and thrown a bond market worth 275 billion euros into turmoil. The Swiss bank’s subprime bonds, which had a face value of around 16 billion euros, are now worth exactly zero euros.

 

Investors in AT1 bonds have panicked after the Swiss Financial Markets Supervisory Authority (FINMA) announced that UBS’s purchase of Credit Suisse will result in a full redemption of the face value of all debt of this type of bond, also known as contingent convertible bonds or CoCos.

These AT1 bonds were introduced after the 2008 financial crisis and were intended to reduce the likelihood that, in the event of a bank failure, the taxpayer would have to pay for the bailout. They are essentially high-risk bonds that are converted into equity if a bank falls below a certain capitalisation limit, offsetting losses.

The announcement by the Swiss National Bank (SNB) that UBS would buy Credit Suisse for 3.01 billion euros, less than half of what the bank was worth at the last stock market close, represented a significant devaluation in the value of the shares. The surprise, however, was that with the purchase and rescue agreement, AT1 bonds were written down to zero, losing their nominal value of some 16 billion euros.

 

Alarm bells rang among investors in the AT1 market

Predictably, the nervousness among holders of AT1 bonds of other banks has become apparent in the face of the possibility of losing their investments in the event of a bank collapse. This puts a 275 billion euro AT1 bond market in jeopardy and is expected to force banks to raise the risk premium on these investment products.

The president of the European Central Bank (ECB), Christine Lagarde, sought to reassure investors who see an increased risk of large losses as part of any bailout, saying that “Switzerland does not set standards in Europe” in terms of conditions for bailing out banks.

It should be borne in mind that in Spain alone, large banks hold some 22 billion euros in contingent convertible bonds, CoCos. These are mainly distributed among the assets of Banco Santander (7,811 million), CaixaBanc (5,000 million), BBVA (5,000 million) and Banco Sabadell (1,750 million). It remains to be seen whether the high market volatility, marked by the banks’ liquidity problems that have grabbed the headlines in recent days, will be exacerbated by the support measures adopted to minimise its consequences.

 

If you want to discover the best option to protect your savings, enter Preciosos 11Onze. We will help you buy at the best price the safe-haven asset par excellence: physical gold.

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Swift, the leading interbank messaging protocol for cross-border payments, has successfully completed the first phase of pilot testing for interoperability with CBDC. The successful outcome of the tests paves the way for the development of a beta version of the system.

 

Globally, most central banks and commercial banks in more than 100 countries are exploring the use of digital currencies issued by central banks. In order to maximise the benefits, CBDCs need to be able to interact within the international payment system, with each other and with existing fiat currencies.

In this context, in October 2022, Swift stated that it had developed a protocol for CBDC to move through systems based on blockchain technology and interact with fiat currencies. A technological breakthrough that would facilitate and streamline international transactions and cross-border payments, beyond traditional systems.

The recent press release announcing the successful testing of interoperability between the global interbank messaging cooperative and digital currencies is an important step towards achieving the goal of digital assets interacting with their traditional counterparts seamlessly, through a payment solution that delivers value to customers and financial institutions.

 

Accelerating large-scale implementation

The first phase of pilot testing lasted 12 weeks and involved 18 central and commercial banks, including the central banks of France, Germany and Singapore, as well as BNP Paribas, HSBC and UBS, among others.

Tom Zschac, Chief Innovation Officer at Swift, noted that “almost 5,000 transactions were successfully simulated between two different blockchain networks and with existing fiat currency-based payment systems“, and that “many of the participating banks have made clear their desire for continued cooperation on interoperability”.

In collaboration with another group including Cite, Clearstream, Northern Trust and SETL, it was also demonstrated how this same infrastructure can be used to interconnect multiple tokenisation platforms with different types of cash payments, simulating transfers in the secondary bond market.

The next step will be to develop a beta version for the second phase of testing to demonstrate new use cases and other practical applications and functionalities, such as securities settlement or trade finance, across different platforms of the more than 11,500 financial institutions that are part of the Swift ecosystem.

 

11Onze is the community fintech of Catalonia. Open an account by downloading the super app El Canut for Android or iOS and join the revolution!

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Despite the VAT reduction, food prices continue to rise at a rate not seen in recent decades. Experts point out that the sector in Europe is taking advantage of this to pass on part of the cost increases of recent years and other parts of the chain could be expanding margins. 

 

According to data from the Consumer Price Index for February, food in Catalonia today is 14.5% more expensive than it was a year ago. This is a record rise and marks the ninth consecutive month of double-digit year-on-year increases.

The figures for Spain are even worse, as the increase in food prices in February reached 16.6% compared to the same month the previous year, the highest recorded in the historical series that began in 1994. And if we look at Germany, the European locomotive, the rise soared to 21.8%. There, people have been able to pay more than three euros for a cucumber.

According to Eurostat, the year-on-year increase in food prices in the eurozone stood at 15% in February. This is a higher percentage increase than that of energy, which was 13.7% in February. The reality is that fuels, which rose by as much as 40%, are tending to moderate their prices, while food prices are picking up speed.

Not even the reduction in January of the VAT applied to a large part of the basic products in the shopping basket, including bread, milk, eggs, fruit, vegetables and pulses, has served to halt the inflationary spiral. According to the National Statistics Institute, the products that have risen the most compared to last year include sugar (52.6%), butter (39.1%), sauces and condiments (33.8%), olive oil (33.5%) and whole milk (33.2%).

 

Less supply?

The Spanish government blames part of this price rise on a temporary reduction in supply due to “unfavourable weather conditions” in many EU countries, which is reducing production. In fact, as we indicated in another article, Catalonia is suffering the most severe drought since 2008. And it is true that this winter greenhouses have been closed in several European countries because the price of gas is making them loss-making.

However, this argument is not very solid when it comes to justifying the high prices if we take into account that the FAO index has accumulated 11 consecutive months of decreases in international food prices.

According to the UN agency, the food price index fell slightly (by 0.6%) compared to January and was 18.7% below the peak it reached in March 2022. Surprisingly, the decline in the index reflected falls in the prices of products such as vegetable oils, butter and dairy products, which have become considerably more expensive in our supermarkets.

 

Impact of costs

Many analysts point out that the price rises have served to offset part of the increase in production costs suffered by the agri-food sector in recent years. These affect such important items as seeds, fertilisers, animal feed and energy.

Fertilisers tripled in price, although they subsequently became 40% cheaper from spring onwards, when they reached their highest price; it is estimated that feed has risen by more than 80% since 2019; and, as for energy, the price per megawatt-hour reached more than 300 euros and the price of a barrel of Brent oil reached 120 euros. In fact, although the price of the latter has fallen by 15 euros between February 2022 and February 2023, diesel is 1.7% more expensive.

In any case, it is not clear that higher food prices always translate into higher incomes for producers. In this sense, there is much debate about which actors in the food chain are taking advantage of the situation to increase their margins. What is certain is that even the president of Mercadona, Juan Roig, has just admitted that his chain has raised prices “a huge amount”.

 

11Onze is the community fintech of Catalonia. Open an account by downloading the super app El Canut for Android or iOS and join the revolution!

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The American multinational investment company has consolidated its position as the largest shareholder of Banco Sabadell, Banco Santander and BBVA, while increasing or maintaining its position as one of the main investors in CaixaBank, Bankinter and Unicaja.

 

New York-based BlackRock is the world’s largest asset manager. With more than $9 trillion in assets under its management, 70 offices in 30 countries and clients in more than 100, its influence extends far beyond Wall Street, managing investments for clients ranging from individual investors to large corporations and governments.

The list of corporations with assets under its stewardship is almost endless: from technology companies such as Apple, Meta and Microsoft, to oil companies such as ExxonMobil, Chevron and Shell, to banks such as Goldman Sachs, JPMorgan and Bank of America. In fact, it would be easier to list ‘the few’ large global companies that are not part of BlackRock’s stock market portfolio.

In Spain, the presence of the US investment giant is well established. BlackRock is the main shareholder of the Ibex-35, doubling its workforce in the last five years and controlling 42,000 million euros in investment assets. Iberdrola, Red Eléctrica, Repsol, Enagás, Telefónica… and, according to data from the Comisión Nacional del Mercado de Valores (CNMV), also lord and master of Spanish banking.

 

Over 25% of the shareholding with an investment of more than 6,000 million euros

BlackRock’s presence in Spanish banking shareholdings has increased progressively over the last few years, consolidating its position as the main reference shareholder in the Spanish banking sector.

In the case of BBVA, Banco Santander and Banco Sabadell, BlackRock is their largest shareholder with 7.4%, 6.2% and 4.46% respectively. On the other hand, it is now the third-largest shareholder of CaixaBank, the fifth of Bankinter, and maintains a small stake in Unicaja.

An upward trend implies a greater influence in the management and direction of these banks, but it is not free of controversy due to the possible conflict of interest it could entail. As Gerald Davis warned, BlackRock is a silent giant, but an incredibly powerful one.

 

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The fall of Silicon Valley Bank and the fear of the bankruptcy of Credit Suisse caused a stock market crash in Spanish banks. Banco Sabadell once again led the sharp falls in the Ibex-35, dropping 10.49% at the close of trading on Wednesday.

 

Credit Suisse shares jumped 40% at the opening of trading on Thursday 16 March, a record high, after the Swiss National Bank (SNB) pledged funding of up to 57 billion euros to bolster its liquidity amid the banking crisis. Credit Suisse chief executive Ulrich Koerner defends the bank’s health and says his bank’s liquidity base is very strong.

The Spanish stock market was quick to react and opened with gains of 1.92%, in a day that will remain pending what happens with Credit Suisse and the meeting of the European Central Bank (ECB), which is expected to raise interest rates by 50 basis points.

 

A day to forget on the Ibex-35

Yesterday, however, the banking sector spurred the red numbers of the Ibex-35 caused by the collapse of Silicon Valley Bank and Signature Bank and the fear of the bankruptcy of Credit Suisse. The Swiss financial institution recorded declines of more than 20% after the refusal of Saudi National Bank, its main shareholder, to provide more capital.

Banco Sabadell once again led the stock market plunge with a fall of 10.49%, more than 500 million euros of its capitalisation. The bank led by César González-Bueno was also the bank with the biggest losses after plunging 11.41% on the announcement of the Californian bank’s defeat.

A day marked by losses that were replicated in the other financial institutions: BBVA (-7.38%) was behind Banco Sabadell, followed by Bankinter (-6.94%), Banco Santander (-6.89%), CaixaBank (-6.72%) and Unicaja Banco (-5.33%). Santander and BBVA are the institutions with the least liquidity drawer in both the short and long term.

 

Guaranteeing customer deposits

The ECB has begun consultations with the main European banks to find out their exposure to Credit Suisse. The aim is to prevent systemic bankruptcy. In the case of Spanish banks, citizens have almost one trillion euros in deposits, while the Guarantee Fund could barely cover 1% of this amount.

For this reason, many of Silicon Valley Bank’s savers transferred their money to financial institutions with an EMI (Electronic Money Institution) operating licence, which cannot use their depositors’ money to cover the institution’s expenses and are regulated by each country’s central bank.

Moreover, these entities cannot offer or promote risky investments, so they may be safer than banks, especially investment banks. Simply because they are not in the business of borrowing and gambling on the stock and credit markets, a business which, as we have seen repeatedly, can be extremely risky.

 

If you want to discover the best option to protect your savings, enter Preciosos 11Onze. We will help you buy at the best price the safe-haven asset par excellence: physical gold.

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A large bank collapses, financial markets panic, and central banks mobilise while the US administration calls for calm and establishes a series of emergency measures to reinforce confidence in the banking system. The sense of déjà vu is no coincidence. 

 

Silicon Valley Bank (SVB) was a Californian bank specialising in lending to technology start-ups. A large part of its business model was based on investing its clients’ money in long-term fixed-income deposits. After decades of very low, or even negative, interest rates, it was a very profitable business. At the end of 2022, the institution had a total of $160 billion in deposits, half of which was invested in US Treasury bonds and mortgage-backed securities.

Clearly, the financial institution had the option of using these customer deposits as collateral for lending rather than investing them to make a larger margin, but in the context of a financial system used to privatising profits and socialising losses, thanks to the public bailouts that have become the norm, it is not surprising that banks have little interest in adopting more conservative risk policies.

 

Sudden deposit flight

In a scenario of crisis and subsequent interest rate hikes by the Federal Reserve to combat inflation, which have made the price of money more expensive, many of these startups are suffering from a lack of funding or want to get more return on their deposits. This has led many of them to withdraw more funds than the bank had planned, thus forcing the financial institution to sell a large part of these investments in public debt before the deadline and at a discount in order to return the deposits.

The fear that the bank would not have enough cash to return the money to customers who requested it caused panic and the withdrawal of 41 billion dollars in just one week. The bank sold a bond portfolio valued at $21 billion, just to cover its liquidity, at a loss of $1.8 billion. A rapid deterioration of the bank’s balance sheet led to its collapse.

We are facing the most significant bank failure since the collapse of Lehman Brothers in 2008, which is also having a major international impact with falls in the stock market values of banks and which risks causing a domino effect that could trigger global economic instability.

Protecting deposits to avoid contagion

Unlike customers of financial institutions such as 11Onze, with EMI (Electronic Money Institution) licences, who are guaranteed 100% of their deposits in the event of bankruptcy, customers of traditional banks such as SVBs can only rely on a Deposit Guarantee Fund run by the central bank of each country to recover part of their money. In the case of the European Union, the FDG guarantees 100,000 euros per customer, and in the United States, the FDIC, a maximum of 250,000 dollars.

These amounts need to be more in cases such as that of Silicon Valley Bank, where most customers have company accounts with deposits far in excess of the maximum guaranteed by the central bank. Faced with this scenario, US regulators launched a plan to protect 100% of Silicon Valley Bank’s deposits, and thus stop a general panic in the financial sector that had already led to the collapse of another bank, New York’s Signature Bank.

Although a repeat of the 2008 financial crisis is not anticipated, the effects of the loss of confidence in a banking ecosystem that, once again, shows so little credibility, integrity and soundness, are difficult to foresee.

 

If you want to discover the best option to protect your savings, enter Preciosos 11Onze. We will help you buy at the best price the safe-haven asset par excellence: physical gold.

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Finances

The security of deposits

2 min read

Having a deposit in a Spanish bank nowadays means getting a low return on our savings.



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