Whatever happened here, according to the publicly available information, There was no scam. The bank did not commit any fraud. Though it is true that the bank hid some facts and did not make timely disclosures to the public. But this is a case of bad decision-making. People in charge of the management of the bank made wrong decisions, It turned out to be the wrong time, and to some extent, this was simply bad luck. You might be thinking that the root cause was the increase in interest rates by the US government, Why did the government do this?
There’s a simple reason for it. To control inflation. Friends, there’s an interesting relationship between inflation and interest rates. When the economy of a country is facing a slow-down, The central bank often reduces the interest rates. So that it is easier for people to take loans. With low interest rates, more people would want to take loans. With more loans, more people would have expendable money. More expendable money would mean that they can spend on various things. With this, the money circulation in the economy would increase And it would boost the GDP.
