Banks of America, including Silicon Valley Bank and Logo Bank, exploded one after another, triggering market panic. Foreign capital Goldman Sachs warned that the domino effect of the banking crisis is brewing. It is estimated that as much as 11 billion US dollars of junk bonds may face default in the first quarter of this year, and this number will exceed 2021. 2022 and 2022 combined.
According to a MarketWatch report, last week Goldman Sachs revised up its forecast for the default rate of junk bonds in the United States this year from 2.8% to 4%.
According to statistics from Goldman Sachs, before the Federal Reserve (Fed) aggressively raised interest rates last year, companies rarely defaulted on their contracts, but since the beginning of this year, corporate defaults have begun to surge. Successive bankruptcies and takeovers have led to a tightening of the credit environment, and there may be more cases of corporate defaults in the future.
In addition, according to CreditSights statistics, as of a week ago, before the collapse of the above two US banks, the junk bonds issued by nearly 100 companies in the United States were in trouble.
For this catastrophic storm, Daniel Pinto, chief executive of Stanhope Capital, criticized that all of this was caused by the Federal Reserve’s (Fed) aggressive monetary tightening policy. Luke Ellis, chief executive of Man Group Plc, warned that a large number of bank failures may occur in the next one to two years.
(Qiu Yixuan, China Times News Network)
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