Credit Suisse was once one of the world’s leading banks, with a reputation for innovation and excellence. But in March 2023, it shocked the financial world by announcing that it had run out of cash and was being taken over by its rival UBS. How did this happen? And what can other banks learn from its demise? Credit Suisse’s collapse is a cautionary tale for all banks that want to survive and thrive in the post-pandemic era. They need to be agile, customer-centric, and responsible if they want to avoid becoming obsolete or irrelevant. Continue reading The Credit Suisse Collapse | What Went Wrong & What Are the Lessons?
Silicon Valley Bank (SVB) was a well-capitalized institution seeking to raise some funds. Within 48 hours, a panic induced by the very venture capital community that SVB had served and nurtured ended the bank’s 40-year run. While relatively unknown outside of Silicon Valley, SVB was among the top 20 American commercial banks, with US$209 billion in total assets at the end of last year. Faced with higher interest rates, loss of IPOs, and a funding drought, SVB’s clients began pulling money out of the bank. Lenders somewhat similar to SVB are in an unfortunate situation. A failure to protect deposits over $250,000 could cause a loss of faith in other mid-sized banks. Analysts said SVB’s collapse is unlikely to set off the kind of domino effect that gripped the banking industry during the financial crisis. Continue reading Silicon Valley Bank | How Does a Bank Collapse in 48 Hours?
A recession is a business cycle contraction when there is a general decline in economic activity. We have seen just as the market can become overwhelmed with greed; it can also succumb to fear. Just as greed dominates the market during a boom, fear prevails following its bust.The recession is nothing but the greed of big businesses to be more profitable by reducing quality and using unfair practices and also of careless arrogant employees giving pathetic service as long as profits are coming. Continue reading Are Greed & Stupidity Causes of Recession?
It is often said that those who do not remember the past are doomed to repeat it. With economics it’s no different, considering the world has experienced dozens of crashes and recessions, undoubtedly caused by acquisitive traders and lawmakers with few memories of the past. Continue reading Understanding the Economy & the Crisis