Safer Banking Research Articles

Do you REALLY Know The Risk In Your Bank?

Lately, there have been quite a few articles and comments discussing the U.S. banking sector’s resilience to potential financial shocks and crises. Most of them are based on a macro or so-called top-down approach. If you follow our work on banking, you know we have been analyzing various issues embedded in U.S. banks’ balance sheets. However, in this article, we aim to reiterate why some analysts fail to fully grasp two key principles of our approach: 1) a bottom-up analysis, and 2) a focus on forward-looking indicators rather than relying solely on current numbers.

by Avi Gilburt - 13 hours ago

Warning: Nearly 2,000 US Banks Are At Risk Of Failure Between 2026 And 2027

This week, Florida Atlantic University published an update on its U.S. Banks’ Exposure to Risk from Commercial Real Estate screener. The update revealed a significant deterioration in the balance sheets of banks exposed to CRE (commercial real estate lending).

by Avi Gilburt - 2 months ago

The Fed Is A Paper Tiger

It seems that even large banks were surprised that the Fed’s 2025 stress test scenarios will be easier compared to the past two years. If you follow our banking work, you know that there are warning signs in almost every lending segment. Even the Fed’s researchers have recently started raising concerns, warning that various issues could lead to a major banking crisis. Yet, the Fed has announced easier and less conservative assumptions for the 2025 stress tests.

by Avi Gilburt - 2 months ago

Auto Loans And Credit Card Delinquencies Are Flashing Strong Warnings

The NY Fed recently released its regular household debt report for the fourth quarter of 2024. In our view, there are two key takeaways from this report.

by Avi Gilburt - 2 months ago

Danger Sign: Shadow Banking Loans Now Exceed Bank Equity

We recently published an analysis of the sector’s loan growth results for the full year of 2024, wherein we highlighted that the total credit portfolio of the sector increased by 2% YoY. However, the majority of this growth was driven by loans to shadow bankers, which rose by 15% YoY. By comparison, residential real estate loans grew by 2% YoY, while commercial and industrial lending increased by 1%.

by Avi Gilburt - 3 months ago

These Are The Banks The Fed Believes Will Fail

The NY Fed has recently published a study on bank failures in the U.S., examining the reasons why banks fail. For this study, the regulator constructed a large database with balance sheet information for most U.S. banks dating back to the Civil War. This dataset is truly unique, as other studies on bank failures have focused only on the period since 1976. As a result, the longer time horizon of this study allows it to include data on over 5,000 bank failures.

by Avi Gilburt - 3 months ago

Shadow Banking Can Topple The Financial Industry

The Fed has recently published an update on consolidated assets and liabilities of domestically chartered banks. In 2024, the sector’s total credit portfolio was up 2% YoY. At first glance, this figure looks okay given the current lending conditions and the interest rate environment. However, a closer look at the numbers tells a different story. The majority of this growth was driven by loans to shadow bankers, which grew 15% YoY. By comparison, residential real estate loans increased by 2% YoY, and commercial & industrial lending was up 1%.

by Avi Gilburt - 3 months ago

Bankruptcies And Credit Card Defaults Spell Big Trouble For Banks In 2025

Back in 2023, almost all mainstream media and analysts from large investment banks were saying that issues in the credit card segment are temporary as charge-offs and delinquency ratios are “just normalizing” following the pandemic lows. If you follow our banking work, you know that we had a different view due to the several reasons we had outlined in our previous articles. We were still very much believe that banks are very likely to face significant problems in the credit card segment.

by Avi Gilburt - 4 months ago

The Fed Is Putting Your Money At Even Greater Risk

We have already published several articles about the powerful banking lobby, led by the largest U.S. banks, and its efforts to water down regulation and protection for the public depositors.

by Avi Gilburt - 4 months ago

Canadian Banks Are Seeing Increased Risks

We have already written several articles on Canadian banks. Canadian banks were among the safest in the world during the GFC, but a lot has changed since then, and we believe the Canadian banking system is very likely to face major issues. One of the most significant problems that we have discussed is that, in contrast to the U.S., Canada has quite a large share of variable-rate mortgages, which are certainly a big headache for borrowers. The latest numbers reported by Statistics Canada, a national provider of statistical data, suggest that the situation continues to deteriorate.

by Avi Gilburt - 4 months ago

The Fed Was Blindsided By Its $200 Billion Loss

The Fed recently released its financial statements for the third quarter. In this article, we're looking at the regulator’s balance sheet and the fact that the Fed was not apparently able to forecast its own financial position.

by Avi Gilburt - 5 months ago

Another GFC Warning Signal For Major U.S. Banks

Trading assets correspond to very large shares of the largest U.S. banks’ capital position. As such, this is another issue that can eat up a huge part of U.S. banks’ capital positions or even make them go underwater, especially if the market begins to transition into the long-term bear market we are expecting.

by Avi Gilburt - 5 months ago

Credit Card Delinquency Approaching Great Recession Peak Is Major Risk For Banks

According to a new report on household debt, which was published by the NY Fed last week, credit card balances increased to $1.17T, 8.1% above the level a year ago. More importantly, as the chart below shows, the share of delinquent credit cards has reached the highest level since 2012. This share is now just around 300 bps below the peak, which was seen during the Great Recession.

by Avi Gilburt - 5 months ago

ECB Warns That REITS Could Take A Big Hit

Last week, we published an article on the U.S. CRE lending and the recent study by the NY Fed, in which the regulator is warning that the banks’ sluggishness in recognizing bad loans, which is often called the extend-and-pretend behavior, has led to an increasing volume of CRE loans set to mature in the near term, which represents a major financial stability risk. According to the NY Fed, this could lead to a large and sudden capital hit for banks and, eventually, to a deposit run and a fire sale of CRE debt and underlying CRE properties. Interestingly, the European Central Bank (ECB) has also published a study about the EU CRE space.

by Avi Gilburt - 6 months ago

The NY Fed Is Sounding The Alarm About Commercial Real Estate

The NY Fed has recently published a research study in which it confirmed our thoughts on the CRE space. The paper said that banks "extended and pretended” their impaired CRE mortgages in the post-pandemic period to avoid writing off their capital, leading to credit misallocation and a buildup of financial fragility.

by Avi Gilburt - 6 months ago

Banking Regulators Continue To Water Down Protections For The Public

We have recently published an article about the recent changes in the Basel III endgame rules, which were announced by the Fed vice chair for supervision, Michael Barr. According to Mr. Barr, the Fed will increase capital requirements for the largest U.S. banks by 9%. As a reminder, the initial plan was to increase the requirements by 19%, which was later cut to 16%, and ultimately taken down to 9%.

by Avi Gilburt - 6 months ago

The Fed Should Be Bankrupt

According to the recent data published by the Fed, the regulator’s cumulative loss has reached $203B.

by Avi Gilburt - 6 months ago

Will Shadow Banking Bankrupt Your Bank?

We have written a lot about shadow lenders and their connections to traditional banks over the past year. Lately, there were also several statements from global banking regulators discussing vulnerabilities in shadow banking. According to the Fed, loans to shadow lenders granted by U.S. banks were $1.1T as of the end of September. While mostly an issue for larger banks, shadow banking is becoming an issue for smaller banks as well.

by Avi Gilburt - 7 months ago

US Banks Have Huge Exposure To Asian Commercial Real Estate Issues

Over the past couple of decades, some large U.S. banks have been increasing their international exposure, with a particular focus on Asia and Latin America. Citigroup is the most notable example here.

by Avi Gilburt - 7 months ago

The Fed Action Is Not Helping The Banks

In this article, we will discuss how the recent rate cut will affect the U.S. banking sector, and it's not as most would think.

by Avi Gilburt - 7 months ago

The Fed Is Not Protecting You

Last week, the Fed vice chair for supervision, Michael Barr, announced that the regulator had cut a proposed increase to capital requirements for the largest US banks by more than half. Yet, amazingly, the mainstream media and research agencies have lauded the 9% increase as a huge win for the largest U.S. banks.

by Avi Gilburt - 7 months ago

Big Issues At Big Banks Are Hiding Right In Front Of Your Face

The recent sell-off in the markets and increasing odds of a recession in the U.S. resumed talks about the resilience of the largest U.S. banks to a major financial crisis. If you're familiar with our banking work, then you're aware of multiple major issues sitting on the U.S. banks’ balance sheets. You can read about them in the prior articles we have written. In this article, we would like to show that even if we ignore all those issues, the narrative that “the largest U.S. banks are well-capitalized and are prepared for financial shock” is still wrong.

by Avi Gilburt - 8 months ago

The Biggest Systemic Risk To The Banking System

Klass Knot, the head of the Financial Stability Board (FSB), which is the world’s financial stability watchdog, has recently issued a statement about the regulator’s key areas of concern. Notably, this statement was almost fully focused on vulnerabilities in non-bank financial intermediation (NBFI), or the so-called shadow lenders.

by Avi Gilburt - 9 months ago

Capital One: You Don't Want This In Your Wallet

We have written several articles on Capital One (COF) over the past two years. Capital One is viewed by many as a bank only having one main line of business, which is credit cards. This is somewhat expected given that the bank is a Top-3 credit card lender in the U.S. However, COF also has quite a significant exposure to subprime car lending, commercial loans, and even CRE lending. In this article, we would like to take another look at COF following their release of 2Q numbers, as asset quality in almost all the bank’s lending segments has deteriorated further.

by Avi Gilburt - 9 months ago

Update on Schwab - Market Analysis for Jul 23rd, 2024

Charles Schwab (SCHW) has recently reported its 2Q24 numbers and held a conference call. On the call, the company’s management announced several important strategic initiatives that should improve SCHW’s balance sheet and organic capital generation. The share price has fallen by more than 15% since then. In this article, we would like to take a closer look at what has happened and if there are any risks to SCHW’s long-term financial stability.

by Avi Gilburt - 9 months ago

Very Troubling Results For The Banking Industry Presented By Citibank And JPMorgan

We have written quite extensively over the last several years about major issues in the credit card segment of the banking industry. The recent sector data has indicated that these issues now look even more worrisome.

by Avi Gilburt - 9 months ago

Will Commercial Mortgage-Backed Securities Take The Markets Down Like In 2008?

We have been writing a lot about CRE lending and its impact on U.S. banks. Another part of this story is that quite a lot of CRE loans are packed into bonds, which are called CMBS (commercial mortgage-backed securities). There have been several interesting pieces of news that led to some notable movements in the CMBS market.

by Avi Gilburt - 10 months ago

JPMorgan And Bank of America Are Calling The Fed's Bluff

The Fed has recently announced the results of its annual bank stress tests. We have written a lot about why the Fed's stress tests do not reflect how the actual financial conditions of U.S. banks would look under a sharp recession scenario. It seems we are not alone. Just several hours before the Fed announced its results, JPMorgan (JPM) issued a press release, saying that, under its own assessment, the benefit in Other Comprehensive Income (OCI) appears to be too large. As a result, JPM’s own stress tests show that the bank’s losses would be higher than those disclosed by the Fed.

by Avi Gilburt - 10 months ago

Larger Banks Are Facing Liquidity Issues

Believe it or not, there are more major issues on larger bank balance sheets relative to smaller banks, which we have covered in past articles. Moreover, consider that there was one major issue which caused the GFC back in 2008, whereas today, we currently have many more large issues on bank balance sheets. So, in our opinion, the current banking environment presents even greater risks than what we have seen during the 2008 GFC.

by Avi Gilburt - 10 months ago

Don't Be Fooled - Big Banks Have Much More Risk Than Smaller Ones

We have written quite extensively over the last several years as to why it's a huge misunderstanding to believe that the largest U.S. banks will be the safer than smaller banks in a systemic crisis scenario. If you look at the data published by various banking regulators, you’ll see that larger banks have much bigger risks than their smaller peers. Yet, for some reason, such data is often ignored by financial media, research agencies, and even independent analysts. We’d like to remind you of some of those issues that we have been discussing in our banking work for more than two years.

by Avi Gilburt - 11 months ago

The NY Fed Is Getting Concerned About Banks And No One Is Paying Attention

A month ago, we published an article on consumer debt, which is becoming a huge issue for the banks from a credit quality perspective, as both credit cards and auto loans have posted sharp increases in delinquency ratios. Recent data published by the NY Fed shows that asset quality metrics have deteriorated even further in the first quarter, particularly in the credit card segment. Moreover, there was a huge increase in the delinquency ratio among low-income borrowers, which looks especially worrisome given the reasons that led to the 2007–2009 GFC.

by Avi Gilburt - 11 months ago

Big Banks Are Pressuring The Fed To Loosen Protection For Depositors

Last week, the Wall Street Journal reported that the Fed and two other U.S. banking regulators are going to significantly reduce a planned increase in capital requirements for the country's large banks. We believe that the key reason is that the powerful banking lobby, led by JPMorgan (JPM), Goldman Sachs (GS), Citigroup (C), and other large banks, launched an unprecedented campaign against these changes.

by Avi Gilburt - 11 months ago

'Climate Chaos' Can Sink Major Banks

The 2024 Banking on Climate Chaos report was published this week. This report examines the global banking industry’s exposure to fossil fuel financing. We're closely following these reports, as energy-related loans generally tend to be one of the worst-performing lending segments from an asset quality perspective in a crisis environment.

by Avi Gilburt - 11 months ago

Consumer Debt Could Be A Bigger Issue For Banks Than Commercial Real Estate

In this article, we’d like to discuss two segments of consumer debt which we think will also have a significant impact upon bank risks: Credit cards and car lending.

by Avi Gilburt - 1 year ago

What Can You Learn From A Post-Mortem Review Of The Republic First Bank Failure?

For the last two years, we have been publishing the analysis methodology that we use to review the strength - or lack thereof - of banks across the country. So, we thought it would be a good idea to explain how performing due diligence using our methodology on Republic First Bank would have kept you from being caught in this bank failure.

by Avi Gilburt - 1 year ago

Commercial Real Estate Loan Risk Getting Worse By The Day

It seems that more companies are getting more honest about what's happening with U.S. CRE lending. A couple of weeks ago, we published an article on Aareal Bank, a German banking group, which reported that 25% of its U.S. office loans had defaulted in the last quarter of 2023. Needless to say, it’s rare to see a 25% NPL ratio even in a crisis environment. Manulife (MFC), a Canadian life insurer, has recently revealed another interesting piece of data about the U.S. CRE space.

by Avi Gilburt - 1 year ago

You Can't Rely On Bank Regulators To Protect Your Cash

Make no mistake about it: Regulators can and will make any decision in a crisis environment, even the most unexpected and bizarre ones, which may often benefit their position rather than those whom they are designed to protect.

by Avi Gilburt - 1 year ago

Even The FDIC Is Getting Worried About Banks

The FDIC has recently published its Quarterly Banking Profile for the fourth quarter of 2023. In our view, this report looks quite interesting as it has further revealed a number of issues in the U.S. banking system. Of course, for everyone who's following our banking articles, these problems should not come as a surprise, as we have been warning our readers of these issues for the past two years.

by Avi Gilburt - 1 year ago

Commercial Real Estate Loans Have Only Begun To Put Pressure On Major Banks

A couple of weeks ago, there was another very concerning story about the U.S. CRE lending market. Aareal Bank, a German banking group, reported that 25% of its U.S. office loans had defaulted in the last quarter of 2023. In our view, there are several important takeaways from the numbers reported by Aareal Bank as well as by the FDIC.

by Avi Gilburt - 1 year ago

The Fed Is About To Put Your Money At Greater Risk

See our latest article on bank safety, titled "The Fed Is About To Put Your Money At Greater Risk."Last week, the media reported that U.S. banking regulators were expected to significantly reduce capital requirements for banks with assets over $100B under the so-called “Basel III endgame proposal." According to Reuters, “the biggest capital savings will come from changes to how banks will have to calculate potential losses from operational risks." In addition, regulators will likely scrap or reduce higher risk-weights on mortgages for low-income borrowers.For everyone who is following our banking articles and is aware of the current stage of the credit cycle in the U.S., this should come as a big surprise.

by Avi Gilburt - 1 year ago

The Capital One/Discover Merger: Two Wrongs Don't Make A Right

Last month, Capital One (NYSE:COF) announced that it would acquire Discover (NYSE:DFS) in an all-stock transaction valued at $35.3B. Some experts said that the acquisition would create a much stronger entity. We disagree. We believe that such a transaction implies that both companies have major issues given the current stage of the credit cycle in the U.S. In this article, we will take a closer look at COF and DFS, given that both companies have recently released their 10-K reports.

by Avi Gilburt - 1 year ago

Larger Banks Have Even Bigger Risks Than Smaller Ones

We have written a lot on why it's a huge misunderstanding to think that the largest U.S. banks will be the safer ones in a systemic crisis scenario. In this article, we would like to discuss collateralized loan obligations (CLOs), another major issue for the U.S. largest banks.

by Avi Gilburt - 1 year ago

The Fed Is Looking At Some Of The Major Risks In The Banking System

Last week, the Fed released the hypothetical scenarios for its 2024 annual stress test. The assumptions for the 2024 stress test have changed very little compared to last year's ones. With that being said, this year's test will include an additional exploratory analysis that will assess the resilience of the banking system to four major risks.

by Avi Gilburt - 1 year ago

Black Box Concerns That Can Collapse Major Banks

We have been warning our readers of various issues in the U.S. banking sector for almost two years. In this article, we highlight a lending segment that looks like a major concern for the largest U.S. banks. Importantly, this issue is being discussed rarely because it is a black box for analysts, investors, and depositors. We're talking about so-called shadow banking loans.

by Avi Gilburt - 1 year ago

New York Community Bancorp: Just The Tip Of The Upcoming Banking Crisis Iceberg

In our banking articles, we have been discussing issues in the CRE loan space for more than 18 months, warning readers that this lending segment could likely lead to a major crisis in the U.S. banking system. Several important events that occurred last week have further confirmed our view that a CRE-induced crisis is likely inevitable.

by Avi Gilburt - 1 year ago

Bank of America: In Worse Shape Than Before?

Bank of America (BAC) has recently published its 4Q23 results. In the presentation deck, there was a slide on which the bank was showing that it had significantly improved its balance sheet since 4Q09. While some areas were indeed improved, there are a lot of issues that could lead to much worse consequences for BAC, compared to the Great Recession, should a major crisis arise.

by Avi Gilburt - 1 year ago

Wells Fargo: Looking Even Uglier Under The Hood

Three months ago, we published an article on Wells Fargo (WFC) in which we discussed the bank's Q3 numbers. In particular, we highlighted a massive spike in the bank's non-performing CRE loans. We also noted that the situation with the bank's CRE lending book was very likely to deteriorate further as this is just the beginning of massive issues with WFC's CRE portfolio. The bank's Q4 results and the commentary from WFC's management confirmed our views. Moreover, in addition to bad results in the CRE space, WFC's Q4 numbers revealed concerning trends in its credit card business.

by Avi Gilburt - 1 year ago

Commercial Real Estate Could Cause Thousands Of Banks To Fail

If you follow our banking work, you have probably noticed that we have published quite a lot of articles on commercial real estate lending. In fact, this segment is in such bad shape now that it could likely trigger a major financial crisis, which could be worse than the Great Recession.

by Avi Gilburt - 1 year ago

OTC Derivatives Are Presenting Huge Tail-Risk To JPMorgan

Over-the-counter (OTC) derivatives are derivatives executed and settled bilaterally with counterparties without the use of an organized exchange or central clearing house. OTC contracts are the riskiest type of derivatives. JPM had $603B in total gross derivate payables as of the end of 3Q, of which around 76% were OTC derivatives.

by Avi Gilburt - 1 year ago

Are You Preparing For Another Banking Crisis? You Should Be

The Fed has recently published the October 2023 Senior Loan Officer Opinion Survey on Bank Lending Practices. This is a quarterly survey conducted by the Fed, which provides insights into the largest U.S. banks' lending practices. We have been discussing various issues in the U.S. banking system for more than 18 months now, and we expect that those issues are likely to lead to a major crisis in the sector. Notably, the October 2023 survey shows that the system is currently facing the issues of which we have been warning.

by Avi Gilburt - 1 year ago

Banking Crisis Likely On The Horizon - Are You Prepared?

It would seem that people do not want to hear that their banks have any issues. This tells me that most market participants are still quite oblivious to the issues we see in the bank balance sheets or are simply choosing to ignore them. Therefore, it seems that there are very few who are preparing for what can be the worst banking crisis seen since the 2008 financial crisis or even the Great Depression.

by Avi Gilburt - 1 year ago

Bank of America Is Developing A Big Problem: Commercial Lending

More than a year ago, we published an article on Bank of America (NYSE:BAC), in which we highlighted some of the bank's issues. In particular, we said that a massive increase in BAC's commercial loan book looked like a major concern to us, although BAC's management named this significant growth in its commercial credit portfolio as a "de-risking of the bank's balance sheet." In this article, we would like to show some recent data suggesting that BAC's decision to massively increase its commercial loan book could turn out to be a major strategic mistake.

by Avi Gilburt - 1 year ago

The Fed Lost $113 Billion And Is Underwater By $70 Billion

The recent data published by the St. Louis Fed shows that even the U.S. banking regulator itself is completely unprepared for a rising rate environment. The chart below shows that the Fed has posted a loss of almost $100B since the beginning of the year, and its total loss since September 2022 has reached $113B. Importantly, these are not paper losses but real losses to the U.S. Treasury and, hence, a part of the U.S. budget deficit. In this article, we would like to take a deeper look at this quite extraordinary event.

by Avi Gilburt - 1 year ago

Wells Fargo Is Developing A Big Problem

A month ago, we published an article titled "Commercial Real Estate May Cause The Next Financial Crisis," in which we mentioned that CRE lending is one of the major issues for the stability of the U.S. banking system, and, importantly, this issue is often underestimated by mainstream financial media, rating agencies, and research departments of large banks. We said that CRE lending, together with consumer loans and C&I credit, would be in the spotlight when banks start reporting their 3Q numbers. In this article, we would like to discuss Wells Fargo's (NYSE:WFC) Q3 numbers.

by Avi Gilburt - 1 year ago

Liquidity Is Still An Issue For Our Banks

If you follow mainstream financial media, you have probably noticed that most of them are saying that the liquidity crisis in the U.S. banking system has ended and is unlikely to repeat. In fact, Jerome Powell just that "banks are generally well capitalized and highly liquid in our country." However, a deeper look at the latest sector data published by the FDIC suggests that the liquidity position in the country's banking system remains challenging, and a potential sharp increase in policy rates could very likely lead to major issues and bank failures.

by Avi Gilburt - 1 year ago

Major Issues To Watch In The Upcoming Banking Earnings Season

In the first article in our series, we discussed consumer lending and its potentially significant negative impact on the stability of the banking sector. In our second article, we discussed CRE (commercial real estate) lending, which also is a major threat to the stability of the banking system, in our view. In this article, we would like to discuss commercial & industrial (C&I) lending.

by Avi Gilburt - 1 year ago

Is Schwab As Bad As Some Believe?

There have been several bearish articles on Schwab lately. For our clients, we published detailed reports on almost all large brokerages that disclose their financial data publicly, and Schwab was among them. As such, we would like to address the bearish thesis on Schwab. Most importantly, please recognize that we're going to discuss the long-term financial stability of the company rather than provide a short-term view on the stock. Our focus always is on the stability of the financial institution rather than opining upon the stock valuation.

by Avi Gilburt - 1 year ago

Big Banks Have Massive Exposure: Canadian Banks Have A Major Issue Developing.

Canadian banks were among the safest in the world during the 2008–2009 crisis, but a lot has changed since then, and we believe the Canadian banking system is very likely to face major issues. One of the most significant problems that we have discussed is that, in contrast to the U.S., Canada has quite a large share of variable-rate mortgages, which are certainly a big headache for borrowers in the current rising rate environment. The latest numbers reported by the Canadian banks suggest that the situation continues to deteriorate.

by Avi Gilburt - 1 year ago

Commercial Real Estate May Cause The Next Financial Crisis

In our first article, we discussed consumer lending and its significant negative impact on the stability of the banking sector. This is the second in this series of articles within which we will discuss commercial real estate (CRE) lending.

by Avi Gilburt - 1 year ago

Consumer Lending Is Deteriorating Banking System Stability

The current rise in consumer lending will likely place greater pressure on the already weak banking system in the coming years. This is just one of the many issues we have identified, upon which very few are currently focusing.

by Avi Gilburt - 1 year ago

Our Banks Are Sick And We Are Watching A Slow-Motion Train Wreck

As part of our ongoing series of articles on bank stability, and at the request of many of our clients at Saferbankingresearch.com, we wanted to address the recent Moody's pronouncement.

by Avi Gilburt - 1 year ago

Big Banks Have Massive Exposure: A Review Of The PacWest And Banc Of California Merger

As part of our ongoing series of articles on bank stability, and at the request of many of our clients at Saferbankingresearch.com, we wanted to address the merger between PacWest (PACW) and Banc of California (BANC).

by Avi Gilburt - 1 year ago

Big Banks Have Massive Exposure: Recent Banking Results Are Concerning

The Big Six Canadian banks have recently reported Q2 results, and the numbers confirmed various concerns that we have discussed in our previous articles. Canadian banks are very likely to face major credit quality issues due to a combination of significant exposure to variable-rate residential mortgages, a higher-for-longer interest rate environment, and a very elevated level of household debt in Canada. Moreover, there is also pressure on the revenue side.

by Avi Gilburt - 1 year ago

Big Banks Have Massive Exposure: The Fed Does Not Have Your Back

We have been skeptical of the Fed's stress tests for quite some time, but this year's results have undermined their credibility even further, in our view.

by Avi Gilburt - 1 year ago

Big Banks Have Massive Exposure: TD Bank Has Several Major Issues

Toronto-Dominion Bank was among the safest in the world during the 2008-2009 crisis. But a lot has changed since then.

by Avi Gilburt - 1 year ago

Big Banks Have Massive Exposure: A Look At Ally Financial

As part of our ongoing series of articles on bank stability, and at the request of many of our clients at Safer Banking Research, we wanted to address Ally Bank in this missive. I want to take this opportunity to remind you that we have reviewed many larger banks in our public articles. But, I must warn you. The substance of that analysis is not looking too good for the future of the larger banks in the United States.

by Avi Gilburt - 1 year ago

Big Banks Have Massive Exposure: A Look At Canadian Banks

As part of our ongoing series of articles on bank stability, we wanted to address Canadian banks in this missive. Canada did not have a banking crisis in 2008. In fact, during the Great Recession, Canadian banks, especially the so-called Big Six, were among the safest banks in the world. However, their business models have changed significantly since then. Yet, many retail depositors in both Canada and the U.S. still think that Canadian banks would be a safe haven in a major global crisis. In this article, we would like to highlight some of the issues we currently see at Canadian banks.

by Avi Gilburt - 1 year ago

Big Banks Have Massive Exposure: A Review Of PNC Bank

As part of our ongoing series of articles on bank stability, we wanted to address PNC Bank (PNC) in this missive. As you can see, PNC has a number of issues which could come to the foreground in the event the market begins to move into a difficult economic environment. In contrast to PNC, the Top-15 U.S. banks we have found at SaferBankingResearch have low exposure to commercial lending, rely on much cheaper funding, have better operating efficiency, and have much higher capital adequacy ratios. The banks we have identified also have lower shares of longer-duration bonds.

by Avi Gilburt - 1 year ago

How Many More Warnings Do You Need About The Danger In Banks?

George Santayana once wisely noted that "those who do not remember the past are condemned to repeat it." Throughout market history, market historians had many instances from which lessons in hubris should have been learned. Yet, most do not learn the lessons history has to offer.

by Avi Gilburt - 2 years ago

I Warned You About The Banks - You Really Need To Act Now.

Many depositors were shocked by the SVB collapse, which, in our opinion, demonstrates that the majority of them are ignorant of serious systemic risks in the U.S. banking system. In fact, we specifically warned about this issue residing at the major banks in an article just weeks before SVB (SIVB) collapsed.

by Avi Gilburt - 2 years ago

Is Your Money Really Safe? I Wouldn't Bank On It

It's only a matter of time before the tsunami is coming. It's time to seek higher ground while you still can. As Ben Franklin once wisely noted, "by failing to prepare, you are preparing to fail.

by Avi Gilburt - 2 years ago

We Are Seeing The Initial Cracks In Bank Stability - Time To Be Cautious

The FDIC recently released its Quarterly Banking Profile, a publication that summarizes the financial performance of all FDIC-insured institutions. In this article, we would like to highlight the key takeaways from the publication, which, in our view, suggest that most U.S. banks are very likely to face major liquidity issues soon.

by Avi Gilburt - 2 years ago

The Fed Is Trying To Pull A Fast One

The Fed is adjusting its bank stress test, but, unfortunately, its new testing standards leave serious holes in determining the true strength of a bank. Let's take a look at the red flags within the Fed's new testing standards.

by Avi Gilburt - 2 years ago

U.S. Bank: Survived The Great Depression, May Not Survive The Next One?

U.S. Bank has major issues of which depositors should be aware, according to our testing methodology for bank strength.

by Avi Gilburt - 2 years ago

Capital One: Danger, Will Robinson, Danger!

The latest in our "Is Your Bank Safe?" series, this one focusing on Capital One.

by Avi Gilburt - 2 years ago

Is Your Bank Safe? A Look At Wells Fargo

We have developed a testing methodology for bank strength, and Wells Fargo, one of the world's largest banks, has major issues of which depositors should be aware.

by Avi Gilburt - 2 years ago

Is Your Bank Safe? A Look At Goldman Sachs

We have developed a testing methodology for bank strength, and Goldman Sachs has major issues of which depositors should be aware.

by Avi Gilburt - 2 years ago

Is Your Bank Safe From A Credit Suisse Collapse?

Credit Suisse has major issues of which depositors should be aware, which can also affect weak US banks.

by Avi Gilburt - 2 years ago

Is Your Bank Safe? - A Look At Bank of America

We have just published the latest article in our "Is Your Bank Safe?" series on Seeking Alpha -- this one on Bank of America (BAC), which has major red flags of which depositors should be aware.

by Avi Gilburt - 2 years ago

Is Your Bank Safe? - A Look At JPMorgan

In our view, JPMorgan is one of the best U.S. mega banks. It is a well-run institution and its business and overall fundamentals have significantly improved over the past 10 years. However, even this high-quality franchise has quite a lot of red flags, which, in our view, could lead to major issues for depositors in a bear market.

by Avi Gilburt - 2 years ago

Is Your Bank Safe? - A Look At Citibank

Over the last few months, we have written several articles outlining our views of banks in general. We explained the relationship that you, as a depositor, have with your bank is in line with a debtor/creditor relationship. This places you in a precarious position should the bank encounter financial or liquidity issues. Moreover, we also outlined why reliance on the FDIC may not be wholly advisable. And, finally, we explained that the next time there is a financial melt-down, your deposits may be turned into equity to assist the bank in reorganizing.

by Avi Gilburt - 2 years ago

Is Your Bank Safe? - There Will Be No More Bank 'Bailouts'

You must understand the relationship you have with your bank in order to protect your assets.What is a "bail-in?"How can a "bail-in" affect your rights as a depositor?In my last article regarding the safety of banks today, I tried to explain the legal relationship you have with your bank:"Although you may feel that you have a credit balance in your bank account, pleaserealize that your credit balance is only as safe as the underlying bank's assets. Since a bank's assets are generally the loans it owns, the underlying loans of your bank are actually your problem. In fact, most people do not realize that the bank is not a simple depository agent for money.

by Avi Gilburt - 2 years ago

Is Your Bank Safe? - There Will Be No More Bank 'Bailouts'

You must understand the relationship you have with your bank in order to protect your assets.

by Avi Gilburt - 2 years ago

Is Your Bank Safe And Why Should You Care Now?

It behooves every investor to make sure that their money is in a safe bank, and there are not very many of those in the US.

by Avi Gilburt - 3 years ago

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