Ethics, morality and the 2023 recession

LAST quarter, the biggest banking collapse of a US bank since the 2008 global financial crisis played out as it succumbed to a classic bank run. Silicon Valley Bank customers frantically withdrew their money before US regulators intervened. The bank failure panicked markets and led to more trouble as weaker banks struggled because of a conundrum of soaring interest rates and self-inflicted ethical issues. Just a week later, Signature Bank shut down while a third bank — First Republic Bank — was rescued. Soon after, the first major threat of global significance was averted by the takeover of Credit Suisse by UBS.

According to US Treasury Secretary Janet Yellen, "that could turn this into a source of significant downside to economic risk." Goldman Sachs then said that this growing stress has boosted the odds of a US recession within the next 12 months. The world's second-biggest economy, China, also sputtered, and the Chinese central bank recently cut their reserve requirements to keep cash flowing. All these events seem to be signaling the start of a global recession.