5min chapter

Bankless cover image

The U.S. Banking System, Federal Reserve, & USDC Post-SVB Collapse with Ram Ahluwalia

Bankless

CHAPTER

What Can a Bank Do to Stop Deposit Flight?

Sally Kohn: It's not mathematically possible for a bank to offer a 4.5% interest date. And so that would impair their equity. If rates go up, that whole maturity portfolio declines in value. She says banks can hold a bond at cost but all the banks are doing what S.V.B. did. But if they raise rates, they lose money and this is being reflected in the market where smaller Banks are getting hit with a re pricing event because of low deposit yields.Kohn: The way you stop it, if you lower interest rates,. I think it will reserve the lowest interest rates. This is the conundrum. How do we fight inflation

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