McDonald: 50 more banks may go bankrupt in the U.S. before the authorities solve the problem

Another 50 banks in the U.S. may go bankrupt before the authorities solve the structural problem, former Lehman Brothers financial corporation vice president Lawrence Macdonald told RIA Novosti.

“Fifty more banks could collapse before they solve the structural problem. Politicians will most likely be forced to somehow impose a much larger retention (of deposits outflows from bank accounts – ed.), well in excess of deposits of $250,000,” he reported.

Bankruptcy of the U.S. investment bank Lehman Brothers in 2008 is considered the starting point of the global financial crisis. Macdonald added that the current problems in the U.S. banking system have similarities with the collapse of Lehman Brothers itself.

Assessing the outflow of funds from the accounts of U.S. financial institutions, Macdonald, who worked at Lehman Brothers during the 2008 financial crisis and was responsible for debt management and convertible securities trading, predicts “hundreds of billions of dollars” that regional banks in the United States would lose. At the same time, he believes these funds will go to big banks and then to Treasury bonds.

The expert added that U.S. authorities will have to increase deposit guarantees over existing ones.

On Tuesday, Bloomberg Agency, citing sources, reported that the U.S. Treasury Department is studying the possibility of guaranteeing all bank deposits in case of deterioration in the banking sector, which may require funds from the Currency Stabilization Fund.

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