Wall Street Giants Expect $8.9 Billion Hit From Bank Failures

The Signature Bank headquarters at 565 Fifth Avenue in New York.Photographer: Jeenah Moon/Bloomberg

The biggest US lenders expect to pay almost $8.9 billion to help replenish the US government’s bedrock Deposit Insurance Fund after it was tapped to backstop uninsured depositors at Silicon Valley Bank and Signature Bank.

Citigroup Inc. expects to contribute as much as $1.5 billion to the Federal Deposit Insurance Corp.’s pot that was depleted to protect deposits at the two failed lenders, making it the last of the country’s biggest banks to disclose the set-asides. In total, the six largest lenders forecast covering 56% of the $15.8 billion it cost the FDIC to protect uninsured depositors. JPMorgan Chase & Co. expects to pay the largest fee, at approximately $3 billion, while Bank of America Corp. and Wells Fargo & Co. will each pay almost $2 billion.

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People do not understand the close call with a collapse of the US banking sector this past February. The main factor that impacted the failed banks was their losses incurred on existing US Treasuries as the FED raised interest rates. The only change since that initial banking crisis until now is that the FED raised the interest rate even higher.

The banking crisis was never solved: it was covered up until the timing was right. The convergence of the banking crisis, supply chain collapse, inflation, true unemployment and wars throughout the world is coming soon. If Kunstler is correct, we have 4-8 weeks. I agree that after Labor day, we will be seeing some major changes in our personal lives.

David DeGerolamo

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