2023 Banking Crisis
They say - “do not let a crisis go waste”. As I am writing this post, the crisis of the moment is the banking crisis of 2023. In the span of a few weeks we have seen a number of banks fail, depositors taking their money out of banks at rates rarely seen in history, and regulators taking exceptional steps to stem the crisis. And by the look of the stock performance for a variety of regional banks it does not seem as though the crisis is over yet.
This is still a developing story as of this writing. I’ll add to it as the story develops.
Collapses
Following are the banks that collapsed during the span of the crisis. They are listed in chronological order:
March 8, 2023 (Wed) - Silvergate Bank (SI)
March 10, 2023 (Fri) - Silicon Valley Bank (SIVB)
March 12, 2023 (Sun) - Signature Bank (SBNY)
March 19, 2023 (Sun) - Credit Suisse (NYSE: CS)
May 1, 2023 (Mon) - First Republic Bank (FRC)
Contagion Risk
The sad situation is that this may not be the end of the casualty list. As of 20th March, 2023, there are a few more patients either in the emergency room or under critical care. These companies have lost a lot of value in market cap since the beginning of March, indicating that they still remain in the suspect-list at least in the eye of the market:
Western Alliance Bancorporation (DE) (WAL)
PacWest Bancorp (PACW)
Citizens Business Bank (CVBF)
Pacific Premier Bancorp (PPBI)
Bank of Hope (HOPE)
Valley Bank (VLY)
Metropolitan Bank Holding Corp. (MCB)
First Horizon Corporation (FHN)
Comerica Incorporated (CMA)
Zions Bancorporation N.A. (ZION)
KeyCorp (KEY)
Customers Bancorp, Inc (CUBI)
Impact on Other Banks & Bank Stocks
Deutsche Bank
US Regional Banks
Open Questions
At a moment like this many questions arise such as:
Why did they fail?
Could we have done anything to save the banks?
What can be done in the future to avoid a similar crisis?