Tariq Al-Rifai, head of the Corum Center for Strategic Studies, said the rapid intervention by US regulators is indicative of the importance of the banking sector to the US economy.
Al-Rifai explained in an interview with Al-Arabiya that financial markets are optimistic about statements from the Federal Bank and US President Joe Biden regarding this crisis.
He added that it is impossible to calculate the impact of the US bank failure crisis on the banking sector and the economy as a whole.
And he continued: “During the global financial crisis in 2008, it started with the collapse of Lehman Bank, and this is a mistake … but the crisis began in March 2008 with the collapse of the bank (Bear Stearns), then the authorities intervened to calm the markets, then the risks returned and collapse of Lehman Bank in September.
He pointed out that this scenario is unlikely to happen again, but the risks still exist, and the question at present is: “Will the current policies solve the problem or not?”
Panic is growing in the stock markets amid strong fears of continued banking collapses after the failure of two US banks.
This comes despite an extraordinary move by regulators on Sunday night to bail out all depositors of failed SVB and Signature banks, and provide additional funding to other troubled institutions.
