KRE - Breach Of Trust: Decoding The Banking Crisis

2023-05-07 03:46:00 ET

Summary

• In March 2023, the fall of Silicon Valley Bank shocked investors not only because it was unforeseen, but also because of the speed with which it unfolded.
• While we can differentiate between good and bad banks and some of these differences are driven by choices banks make on how they build their deposit bases and the loans and investments that they make with that deposit money, these differences are often either ignored or overlooked in the good times by investors and regulators.
• I do believe that there are more dominos waiting to fall in the US banking business, with banks that have grown the most in the last few years at the most risk, but I also believe that unlike 2008, this crisis will be more likely to redistribute wealth across banks than it is to create costs for the rest of us.

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