??Another global banking crisis? Credit Suisse’ fiasco, Tick tock, taxpayers and India shining@Central Banking Awards 2023??????

Another Global Banking Crisis ahead?

Last week was a rollercoaster ride for the banking industry. From the collapse of Silicon Valley Bank and Signature Bank to Credit Suisse's fiasco, US and European banking systems saw massive cracks emerge in last few days – The failures of SVB, Signature Bank and Credit Suisse have already been well discussed and analysed by all. but can this lead to another global banking crisis? Well, I wish, NOT.

Silicon Valley Bank's collapse serves as a cautionary tale of the perils of deregulation, with potential ripple effects on interest rates and the broader financial system. The authorities' swift actions may have averted a full-blown crisis, but concerns remain for the start-up ecosystem and the VC industry. In summary, it's a sobering reminder that even the most innovative players in the tech world are not immune to the realities of the financial markets.

To avoid ending up in a liquidity crisis like Silicon Valley Bank and Signature Bank, banks need to diversify their portfolios, take a forward-looking view of risk, and test their loan book frequently. Remember, concentration amplifies risk, while diversification diminishes it, so don't put all your eggs in one basket unless you want to end up with a scrambled mess.

The failures of Silicon Valley Bank and Signature Bank may not be the end of the world, but they sure are causing some macroeconomic and industry ripples. Keep an eye out for potential changes in interest rates, credit availability, unemployment, consumer/business spending, inflation, and various industries, and remember: when banks fail, it's not just about the money, it's about the economy, honey!

2nd Observation is about Credit Suisse’ fiasco ->

Credit Suisse's recent share slump can be attributed to a series of scandals, management changes, massive losses, and an unimpressive strategy of revival in last few years. The share price sell-off was triggered by losses associated with the collapse of investment funds and the departure of top executives. Credit Suisse faced a massive loss of 7.29 billion Swiss francs, and clients pulled out 110 billion Swiss francs in the fourth quarter. In December, the bank raised 4 billion Swiss francs from investors.

With over 50,000 employees and 150 offices in around 50 countries, the bank's failure would have severe consequences for the entire financial system.

As of now, the bank's turnaround plan remains unconvincing, and its shares have lost more than 75% of their value in the past twelve months. UBS is looking to buy Credit Suisse for up to $1 billion – significantly lower to its market value.

Let’s wait & watch – will European banking system will also take a breather like the US one in the coming weeks.

Other key observations:

• Tick tock, taxpayers! Time is running out to save BIG on taxes. With a plethora of investment options available, including ELSS, PPF, and NPS, you can maximize your returns and save taxes before Financial Year 2022-23 comes to an end. Don't delay, start your tax-saving journey today with a financial advisor's help! ?????? More here
• Move over, The Rock - India has a new People's Champ! RBI Governor Shaktikanta Das has been named Governor of the Year at the Central Banking Awards 2023 for his leadership in navigating challenges and ensuring stability in the Indian banking system. ?????????? More here