First Bermuda Securities Sees Opportunity in the Banking Crisis
24 March, 2023
The failures of the U.S.’s Silicon Valley Bank and Signature Bank and UBS’s takeover of Credit Suisse have led to heightened critical analysis regarding liquidity and solvency within the worldwide banking system. While the banking industry is stable and well-capitalised by historic standards, it may again be tested later in 2023 or 2024. The reason is a confluence of forces at work: (i) rapidly rising rates and the Fed’s unrelenting focus on achieving U.S. price stabilisation; (ii) the resulting structurally higher rate environment for the foreseeable future; (iii) banks slamming on the lending brakes and the coming credit squeeze; and (iv) unprecedented public and private sector debt levels including mismatches in duration for banks and non-banks. Look for new opportunities to emerge in extending credit to small and mid-sized businesses for those with cash to deploy and the re-emergence of distressed debt funds as liquid investors seek opportunities in the world-wide sell-off of riskier assets to meet collateral and margin requirements of challenged lenders.
**********************************
About First Bermuda Securities Ltd.
First Bermuda Securities Ltd. (“FBS”), an exempted Bermuda company, is a strategic advisory, compliance consulting and listing services firm based in Hamilton, Bermuda. Please contact us or visit our website at www.fbs.bm for additional information. We welcome proposals to engage for mutual benefit and promise a prompt and confidential response.
