‘Dr. Doom’ economist Nouriel Roubini warns US regional banks will ‘actually’ face a credit score crunch
- “Dr. Doom” economist Nouriel Roubini stated US regional banks will “actually” face a credit score crunch.
- “There shall be actually some credit score crunch particularly amongst regional banks, these are those which can be squeezed,” he stated.
US regional banks are ‘actually’ going to face a credit score crunch – and that can erode development on the earth’s largest financial system, in line with “Dr. Doom” economist Nouriel Roubini.
“There shall be actually some credit score crunch, particularly amongst regional banks. These are those which can be squeezed,” Roubini informed Bloomberg Wednesday throughout the Qatar Financial Discussion board in Doha.
“These are the banks that lend loads to households, to small companies and medium-sized enterprises, and industrial actual property. Estimates as of now’s that, that credit score crunch goes to scale back financial development within the US by a minimum of 50 foundation factors,” the economist stated.
Fears of a credit score squeeze have risen as banks tightened lending requirements – to iron out asset-liability mismatches and defend steadiness sheets – following the failures of a number of US lenders in latest months. Morgan Stanley’s prime inventory strategist cited lending knowledge final month to counsel that the mortgage crunch had already begun.
“If there are different headwinds for the worldwide financial system, you can see within the second half of the 12 months, outright contraction in america,” Roubini added.
Roubini has beforehand sounded the alarm on a US credit score crunch, saying a “good chunk of the US banking system” will face a “critical” squeeze, tipping the financial system into recession, he added.