What the author writes is possible, but very very very unlikely.
But in December, the Financial Stability Board estimated that, for the 30 “global systemically important banks,” the average exposure to leveraged loans and CLOs was roughly 60 percent of capital on hand.
So, the *exposure* is 60% of the capital in hand. To put the number in context, the big banks currently operate with 8X leverage at a minimum. i.e. the well capitalized banks carry 800% exposure of the "Capital in hand" to all "Risk Weighted Assets". Before 2008, banks would sometimes go up to 30X+ leverage.
So the 60% number is peanuts, once you gain some perspective of what Fractional Reserve banking means, and has meant for 100+ years.
Add to that, a lot of that exposure will likely be backed by some form of collateral. The collateral rules (terminology you can look up are IM=Initial Margin, VM=Variation Margin, UMR=Uncleared Margin Rules) have been significantly strengthened since 2008, AND additional layers of safety in the form of different types of VA's (VA=Valuation Adjustment, think of them as internal insurance mechanism inside the big banks) have been beefed up and strengthened. So any systemic issue will have to breach several such layers of protection before it becomes a systemic crises.
Banks making huge losses for 2-3 years is likely. Complete collapse seems unlikely to me.
Now, banks operate on confidence and faith that people put on them AND the financial system backed by sovereign entities. If that goes, the banks will likely collapse irrespective of whatever collateral, VAs etc you may have on the book. Can that confidence evaporate for some reason? It's possible. However, I'd argue it is far less likely to happen right now than in 2008. 20 years later, once all the people with memories and lesson learned from 2008 retire - maybe the possibility will increase back up again. Nor right now.
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The above is not to say everything is hunky dory. Several layers of redundancies in the in the Valuation Adjustment and Collateral calculations have been stripped off in the last 3-4 years. Individually, they don't make much difference. Together, they make the system a little bit weaker - which I am not a big fan of.
Hopefully the regulators will start becoming more stringent again after this crisis AND hopefully that will be facilitated by a change in political wind away from the proponents of the billionaire-wing economics (as opposed to left-wing or right-wing).