US Bank Collapse Measures of 2023. Read more here.✓>>👇

The collapse of US banks refers to the series of events that led to the failure of several major banks in the United States during the global financial crisis of 2008. The crisis was triggered by the bursting of the housing bubble, which led to a sharp decline in the value of mortgage-backed securities held by banks and other financial institutions.

As the value of these securities plummeted, many banks found themselves holding large amounts of toxic assets on their balance sheets, leading to a sharp decline in their capital levels. As a result, several banks, including Lehman Brothers and Washington Mutual, were forced to file for bankruptcy or were acquired by other institutions.

To prevent a complete collapse of the banking system and stabilize financial markets, the Federal Reserve took several measures, including:

Lowering interest rates: The Federal Reserve lowered interest rates to near-zero levels in an effort to stimulate lending and promote economic growth.

Injecting liquidity into the system: The Federal Reserve provided emergency funding to banks through a variety of lending facilities, including the Term Auction Facility and the Primary Dealer Credit Facility.

Implementing quantitative easing: The Federal Reserve implemented several rounds of quantitative easing, in which it purchased large quantities of Treasury securities and mortgage-backed securities in an effort to lower long-term interest rates and stimulate economic activity.

Strengthening bank supervision and regulation: In the aftermath of the crisis, the Federal Reserve implemented new regulations aimed at improving the safety and soundness of the banking system. These regulations included higher capital requirements, stress testing, and enhanced supervision of large, systemically important financial institutions.

Overall, the Federal Reserve's actions helped to stabilize the banking system and prevent a complete collapse of financial markets. While the crisis had a significant impact on the economy and millions of Americans, the measures taken by the Federal Reserve played a critical role in preventing a much deeper and more prolonged recession.