What is the banking crisis of 2023?

The crisis the WSJ is alluding to is the short-term “crisis of 2023.” The industry, however, is in the throes of the “ Crisis of the ‘20s, ” a crisis that will last the entire decade. This crisis touches banks’ products, technologies, people, processes, and the political climate. Here are five elements of the Banking Crisis of the ‘20s:

Will a banking crisis subside?

Investors have been selling down regional US banks, in particular, over concerns they might have balance sheets that resemble SVB’s finances. But other parts of the market, including US tech stocks, have held up well during a volatile few weeks, indicating some investors expect the threat of a banking crisis to subside.

How can financial jargon help explain the banking crisis?

Understanding financial jargon can help explain the banking crisis. In March 2023, Silicon Valley Bank (SVB) in the United States collapsed suddenly. The failure of the California-based lender marked the largest bank failure since the 2008 financial crisis and sent shockwaves across global financial markets.

Why did three banks go belly up in 2023?

While rising interest rates, declining commercial property values, and a looming recession spell trouble for the entire banking sector, three banks went completely belly up in 2023—and they owed their problems to additional headwinds: SVB declared insolvency on March 10, 2023.