{"id":63713,"date":"2022-10-06T12:36:39","date_gmt":"2022-10-06T17:36:39","guid":{"rendered":"https:\/\/olduvai.ca\/?p=63713"},"modified":"2022-10-06T12:36:39","modified_gmt":"2022-10-06T17:36:39","slug":"a-banking-crisis-looms","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=63713","title":{"rendered":"A Banking Crisis Looms"},"content":{"rendered":"
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\"General<\/a><\/div>\n
General view of the Bank of England, in the financial district known as The City, in London on Aug. 2, 2021. (Alberto Pezzali\/AP Photo)<\/div>\n<\/div>\n

A Banking Crisis Looms<\/span><\/a><\/h3>\n
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My columns have turned rather apocalyptic of late, but for a valid reason. Just this week, we got confirmation that our financial system is, again, on the brink of collapse, when the Bank of England (BOE) was forced to enact, de facto, a bailout of the pension funds of the United Kingdom.<\/p>\n

On Sept. 28, around noon, the Bank of England stepped (back) into the gilt markets and started buying government bonds with longer maturities to stop the collapse in their value, which could have caused the financial system to become unhinged. Pension funds were faced with major margin calls, which threatened to cause a rapidly cascading run on their liabilities, as trust in their liquidity and solvency would have become questioned by a widening circle of investors and customers.<\/p>\n

Effectively, the BOE stepped in to limit the vicious circle of\u00a0margin calls<\/a>\u00a0faced by\u00a0pension funds<\/a>\u00a0because of the crashing values of the gilts.<\/p>\n

Without the BOE intervention, mass insolvencies of pension funds\u2014and thus most likely other financial institutions\u2014could have<\/a> commenced that afternoon. It\u2019s obvious that if one of the major financial hubs of the world, the City of London, would face a financial panic, it would spread to the rest of the world in an instant.<\/p>\n

It looks as though the global financial system was pulled from the brink of collapse, once again, by central bankers. However, this was only a temporary fix.<\/p>\n

It\u2019s now clear that an outright financial collapse threatens all Western economies, because if pension funds, often considered very dull investors because of their risk-averse investing profile, face a threat to their insolvency, it can happen to any other financial institution…<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

General view of the Bank of England, in the financial district known as The City, in London on Aug. 2, 2021. (Alberto Pezzali\/AP Photo) A Banking Crisis Looms My columns have turned rather apocalyptic of late, but for a valid reason. Just this week, we got confirmation that our financial system is, again, on the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[61,2014,124,312,1603,16350,24423],"class_list":["post-63713","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banking","tag-banking-crisis","tag-central-banks","tag-financial-crisis","tag-global-financial-system","tag-the-epoch-times","tag-tuomas-malinen"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/63713","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=63713"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/63713\/revisions"}],"predecessor-version":[{"id":63714,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/63713\/revisions\/63714"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=63713"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=63713"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=63713"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}