How much longer will America’s regional banks hold up?

As four banks collapse in the US, policymakers are urged not to guarantee deposits to prevent the creation of zombie banks.

March 25, 2023 . 12:28 AM

1 min read

Four banks have collapsed in the past fortnight, including a global systemically important bank.
If fixed-rate assets had to be liquidated tomorrow, the banking industry would lose nearly a third of its capital base.
One in ten financial institutions looks more poorly capitalised than Silicon Valley Bank.
Two California-based banks have reported significant deposit flight, losing up to 40% and 20% of their deposits.
Policymakers must avoid intervening prematurely to guarantee deposits, which could lead to the creation of zombie banks.