A Wall Road skilled has revealed which financial institution he believes will fail subsequent, following the Silicon Valley Financial institution (SVB) collapse.
SVB folded on Friday after failing to lift new capital after it offered authorities bonds at heavy losses to reimburse clients withdrawing their money.
Now Robert Kiyosaki, who precisely predicted the 2008 Lehman Brothers’ collapse, warned that Credit score Suisse might be in danger because the risky bond market crashes, with rising curiosity inflicting bonds to fall in worth.
Talking on Cavuto: Coast to Coast, Mr Kiyosaki stated: “The issue is the bond market, and my prediction, I referred to as Lehman Brothers years in the past, and I feel the subsequent financial institution to go is Credit score Suisse, as a result of the bond market is crashing.”
Holding up a greenback invoice, he added: “The US greenback is shedding its hegemony on this planet proper now. In order that they’re going to print an increasing number of and extra of this … making an attempt to maintain this factor from sinking.”
He made the prediction simply hours earlier than Credit score Suisse admitted it has a “materials weak point”.
In its annual report, the financial institution stated it was adopting a treatment plan after it discovered its reporting procedures for the fiscal 2021 and 2022 years had been “not efficient”.
However the financial institution’s chief govt Ulrich Koerner informed a monetary convention: “Our SVB credit score publicity shouldn’t be materials”.
It comes after US President Joe Biden stated that folks and companies that had deposited cash with SVB would have the ability to entry all their money from Monday, after the federal government stepped in to guard their deposits.
The UK arm of the enterprise was purchased by HSBC for £1.
Alongside SVB, two different US banks that cater to the cryptocurrency market – Signature and Silvergate – additionally went out of enterprise final week.
Different international financial institution shares have additionally slumped. On Tuesday, Japan’s Topix Banks noticed its shares fall by greater than 7 per cent, whereas Mitsubishi UFJ Monetary Group’s index was down by 8.1 per cent in mid-day Asian buying and selling.
Within the UK, worldwide financial institution Commonplace Chartered sunk to the underside of the FTSE 100 with a 6.9 per cent drop in share worth, whereas Barclays was down by 6.3 per cent.
However credit standing company Moody’s stated that whereas rate of interest will increase had harm the worth of enormous European banks’ bond portfolios, the impression could be “momentary and average”.
It added: “We contemplate European banks are usually properly positioned to keep away from the necessity to promote their bonds at a loss.”