Is Our Financial System About to Melt Down? A Discussion with Jonathan Treussard and Paul Solman
Economics Matters -- the Podcast invites you to this conversation I held with financial expert and consultant, Jonathan Treussard, and PBS NewsHour economics correspondent, Paul Solman, on the collapse of Silicon Valley Bank (SVB) and its likely aftermath. This discussion was held Sunday afternoon, March 12th, before the FDIC's announcement that it would insure the uninsured deposits of SVB and, the next day, Signature Bank. The Fed also announced a new lending facility to assist banks with liquidity if they were to face runs by uninsured depositors. As discussed in this newsletter, these policies may not suffice to stop a slow and growing run by non uninsured depositors to transfer their money from risky banks to mutual funds that hold Treasury bills -- a run that could produce a meltdown of the financial system. That's strong language, but the banking system holds some $18 trillion of deposits, $8 trillion of which are uninsured.
Economic Matters - The podcast is hosted by Laurence Kotlikoff and moderated by Alex Kotlikoff.
Laurence Kotlikoff is a Boston University Economist, a NY Times Best Selling Author, President of maxifi.com, and Author of Money Magic.