The Controversy Surrounding Too Big to Fail Banks, Explained
Channel: That's All I Have To Say About That
Date: 20/03/2023

In this video, we dive into the world of banking and explore why "too big to fail" banks are no longer the achievement they once were. We start our story back in 2018 when rolling back banking regulations was on the agenda. We fast forward to the present day, where the pandemic is tearing through the country and the economy is hitting all-time highs. However, smaller regional banks are struggling to keep up with the larger, "too big to fail" banks due to relaxed regulations. We explore the controversy surrounding the use of cash-like assets, such as government bonds, and why they pose a problem for banks in today's market. We also look at the recent rise in interest rates and how it's causing cash-like assets to lose value. As a result, bank runs are happening, forcing smaller banks to sell their bonds at substantial losses. We discuss potential solutions to avoid another financial collapse and the importance of maintaining faith in the banking industry.