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As the drumbeat of bad news from the US regional banks grows steadily louder, Euromoney talks to market veterans about the lessons that can be learned from the event that started it all: Silicon Valley Bank’s collapse in March.
Many questions must be asked of the US regional banking system.
Can it stabilize following the collapse of Silicon Valley Bank (SVB), Signature Bank and First Republic – not to mention the liquidation of Silvergate? Has the deposit run, which saw $42 billion pulled from SVB in a few hours and $100 billion drain away from First Republic in the first quarter, now stopped or just slowed to a walk?
And to what extent will a new, higher-cost phase in bank funding – with regional and large banks responding to sharply higher deposit betas by boosting deposit rates – weaken bank profitability?
