Opinion: No, the failure of three U.S. banks and a crisis at Credit Suisse is not 2008 again

Craig Alexander has served as chief economist at Deloitte Canada, the Conference Board of Canada and Toronto-Dominion Bank.

It is indeed important to take the right lessons from the prior crisis and understand the commonalities and differences between now and then because they will shape what is in store. However, this is not 2008, and the underlying financial vulnerabilities are not the same., are the catalyst for triggering a repricing of risk and financial assets – and this often causes an unwinding of any imbalances that have built up during the period of economic expansion.

However, the impact of rising interest rates today are different. The underlying economic and financial imbalances of today are much less pronounced, implying the associated financial losses should be more manageable. Another lesson from 2008 is that when there are financial strains, policy makers need to ensure banks have access to short-term funding, referred to as liquidity, to balance the books at the end of each day. This normally comes through lending between banks, but central banks must fill the gap when financial turmoil occurs. This is why policy makers today have been so quick to announce additional liquidity funding. Similarly, U.S.

BTW it’s 180 banks crashing around the world !

OMG 😳 Keep up Globe Yellen just said they were not going to bail out anyone now .. Private jets landed in Nebraska to see the Oracle . Guess who they were ? On a Sunday night just before Monday bloodbath !

Sure seems like it.

You are correct. It is 2023.

It's something new as interest rates increase, not history, lesson is yet to be learned.

Maybe it’s worse. In 2008 interest rates had not risen at the fastest rate since 1980. Rates have almost quintupled. Nor was the economy trying to rebound from a global pandemic.

The next thing to go bye bye are all the jobs for the middle class 500 million plus slaves that are educated and restless right now! All the people have been paying in with their tax monies and hard work to bail these corporations out for the last 30 40 years!

Correct. It’s far worse, because the Fed doesn’t have the ability to lower rates to zero this time to cover it up. Run the numbers. Lesson in there.

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