Originally Posted by Unregistered

Very much so.
Low rates.
Plus govts were paying people money.
Giving money to businesses
The nunber of bankruptcies globally DECREASED during covid
Where does the cash given out to people go to if they cannot spend?
Banks.
Banks had to decide what to do with the extra billions of deposits
They lowered mortgage rates.
Property went up. People wanted bigger home offices to work from
Also banks invested the cash deposits into T bills.
But when fed raised rates the yields from the T bills bought during covid
Were no longer attractive.
Some us banks like svb ran into liquidity problems when clients withdrrw all their cash
They had to sell their T bills. But mo one would pay what the bank paid for it.
The yield had to be higher and thus the value of the T bills halved.
Simple math. If $100k of T bills yield 2%. Now yield are 4%. So for those old T bills the value has to be 50k for the same yield to be now 4%.
Bank go bankrupt.
Sg banks have higher reserve ratios than US banks.