50 more US banks could go bankrupt before authorities fix structural problem

WASHINGTON, March 22 – RIA Novosti. Lawrence McDonald, former vice president of financial institution Lehman Brothers, told RIA Novosti that 50 more banks in the US could go bankrupt before authorities fix the structural problem.

“Until we fix the structural problem, 50 more banks may collapse. Politicians will likely somehow be forced to impose a much larger withholding tax (deposits out of bank accounts – ed.), deposits in excess of $250,000”, reported.

The bankruptcy of the American investment bank Lehman Brothers in 2008 is considered the starting point of the global financial crisis. McDonald added that the current problems in the US banking system are similar to the collapse of Lehman Brothers itself.

McDonald, who worked at Lehman Brothers during the 2008 financial crisis and was responsible for debt management and convertible securities trading, estimates the outflow of funds from the accounts of US financial institutions, regional banks “hundreds of billions of dollars” in the region. The USA will lose. At the same time, according to him, these funds will go to big banks, and then to treasury bills.

The expert added that the US authorities will have to increase their deposit guarantees compared to existing ones.

On Tuesday, Bloomberg reported, citing sources, that the U.S. Treasury is examining the possibility of guaranteeing all bank deposits in the event of a disruption in the banking sector that could require funding from the currency stabilization fund.