by Peter Zeihan on September 7, 2023

The Ukraine War has negatively impacted almost every area of life, but perhaps there’s a silver lining beneath all the global disruptions and adverse effects…It may sound like a stretch, but this war may have helped to prevent a financial crisis in the US.

One of the leading causes of a banking crisis is loan defaults, but with personal incomes on the rise and unemployment rates falling, banks aren’t facing their typical roster of issues. However, anytime a bank is overexposed to risk, a crisis isn’t often far behind.

As the Ukraine War started, financial institutions of all sizes knew they had to limit their exposure to Russia. This indirectly resulted in many of these firms reducing exposure to Chinese financial institutions.

As Russia and China continue to cut themselves off from the rest of the world, it appears that many of the US banks may have dodged a bullet. There’s always the risk of a break, but the US financial sector looks pretty good, with low international exposure, a low unemployment rate, and high growth.

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