BANKING DISTRESS-A COMPARATIVE APPROACH OF TWO BUSINESS CASES IN THE BANKING SECTOR IN USA IN 2023

The aims of the paper are to explore the recent liquidity stress situations encountered by the regional banks in the United States of America (with a particular focus on Silvergate Bank and Silicon Valley Bank, both headquartered in California) and to provide a descriptive viewpoint on the regulatory framework, prudentiality and financial management issues, including accounting aspects and corporate governance. The research methodology pertains to the cause-effect analysis and the dynamics of changes over time and to the synthesis of documented authentic public resources of information, giving substance to the main findings. The paper explores the causes and the consequences of the failing banks from the perspective of implications to the current regulatory environment and prudential requirements, with a view to the financial markets functioning. It analyses the business models and the root -causes that led to the recent distress in the first quarter of the year 2023 in the US banking system. The conclusions draw evidence on how clustered liquidity stress and fast-unfolding bank runs became risk factors, in a context where regulatory environment allowed for a more relaxed supervisory stance on banks and the rising interest rates in an inflationary economy affected the market value of financial instruments as means of liquidity in banks' portfolios. Still, despite some particular situations pertaining to some US banks, the US banking sector remains resilient, with significant risk-absorbing capacities.