US banking crisis

The United States is facing a banking crisis. On March 10, news broke out of the biggest failure of a US bank since the global financial crisis of 2008. Banks have been stressed in recent months by rising interest rates, which reduce demand for borrowing money.

The US Federal has pushed interest rates higher over the last year in a bid to tame inflation. There is a historic correlation between higher interest rates and failures of overleveraged financial institutions. This happens when businesses borrow too much money and cannot pay interest or maintain payments for their operating expenses.


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