Bank runs. What is next?
The banks facing difficulties in the USA and Switzerland include Silicon Valley Bank, Signature Bank, First Republic Bank, and Credit Suisse. Silicon Valley Bank, essential to the tech industry’s financial ecosystem, has been taken over by the FDIC following a classic bank run. Signature Bank has also faced a similar situation, while First Republic Bank is under severe pressure. Additionally, Credit Suisse has been acquired by UBS at the demand of Swiss authorities, resulting in widespread speculation about the possibility of additional unforeseen challenges. continue reading.
Time Value of Money in Presence of High Inflation
The time value of money is an essential financial concept that explains the future cash flows on different dates. The present value of money can be invested in earning positive interest to receive greater future value; therefore, interest rates can be considered the required return rate. continue reading.
Inflation, causes, the Fed interests rate policy, and potential economic effects
What is inflation?
Inflation refers to the general increase in prices of goods and services over time, reducing the purchasing power of money. In other words, inflation is the rate at which the overall level of prices for goods and services rises, and consequently, the currency’s value decreases. continue reading.
Is it efficient for Federal Reserve to implement more significant interest rate hikes rather than smaller ones and sacrifice employment?
The Federal Reserve is responsible for maintaining stable prices and maximum employment in the economy, and it often uses monetary policy tools such as raising interest rates to control inflation. While increasing interest rates can help slow down inflation, it can also reduce economic activity and potentially cause job losses. In terms of ethics, the decision… continue reading.
Bilgin Demir 