The collapse of Silicon Valley Bank (SVB), the failure of Signature Bank, the close-call of First Republic, and the bailout of Credit Suisse had many proclaiming earlier this year that banking was heading toward an industry-wide disaster. The chair of the FDIC reported in March of this year that American financial institutions incurred a total of $620 billion in unrealized mark-to-market losses. The stock markets certainly reflected those figures. The Nasdaq index for bank stocks dropped by a quarter within a week after SVB’s failure was announced. Gains accumulated over the past quarter century evaporated in just a few days, with U.S. regional lenders bearing the brunt of the impact. While last month saw the banking sector make a modest rebound, the sector gauge remains down by 20% so far this year.
