Let’s talk about what’s going on in markets and the economy after the recent bank failures.
Quick recap: Over the last few weeks, several banks have collapsed under the pressure of bad management, high interest rates, portfolio losses, and a run of depositor withdrawals.
Since then, regulators, governments, and other major financial institutions have stepped in to take over troubled banks and guarantee deposits. ¹ ²
It has also emerged that Silicon Valley Bank (the first to fall) had already been under regulatory review by the Federal Reserve for more than a year about the very issues that triggered its collapse. ³
One of the possible silver linings of these failures is that other small institutions with similar problems are probably looking very hard at their books and reassessing their strategies to avoid a similar fate.
