The state of the US economy has become the top issue of the upcoming November election, with analysts and ordinary Americans alike warning about inflation, housing prices, and risks associated with America’s $35.7 trillion federal debt. Now, the nation’s top financial market regular says there’s another threat to worry about.
The $13 trillion in cash being held in offshore banks could threaten US and global financial stability in the event of a repeat of the 2008 financial crisis, which plunged much of the world into a years-long great recession, US Security and Exchange Commission chairman Gary Gensler has warned.
“I want to highlight an additional risk, though one in the banking, rather than nonbank, sector. As it relates to bank deposits, it’s not just the $20 trillion of deposits in the domestic commercial banking and credit union sector. There’s another $13 trillion of dollar funding offshore in non-US banks. Many of these overseas dollar deposits are uninsured. We’ve seen stress in Eurodollar markets disrupt economies around the globe, such as during the ’08 crisis,” Gensler said in a speech in Washington on Tuesday.