Credit crisis looming: half of US banks are insolvent, according to The Telegraph.

247 - The U.S. banking system is facing a potentially disastrous situation due to a double crisis in the commercial real estate sector and the bond market, journalist Ambrose Evans-Pritchard pointed out. The TelegraphWith $9 trillion in uninsured deposits, banks are vulnerable to losing large sums of money, which could make them insolvent.

According to a report by the Hoover Institution, more than half of American banks have negative equity, with their assets worth less than their liabilities. 

To date, the US Treasury and the Federal Reserve have failed to address the crisis, and while they may contain the immediate liquidity crisis by temporarily guaranteeing all deposits, this does not resolve the larger solvency crisis, the journalist states. The risk of a credit crunch is high, and hundreds of small and medium-sized banks are expected to reduce lending to avoid a fate similar to that of Silicon Valley Bank and Signature Bank. 

The crisis could also be exacerbated by the refinancing cliff that the US financial system will face over the next six quarters.