Company			Symbol	Uninsured deposits / 	Loans and HTM/		YTD %
domestic deposits 	total deposits		change
(higher is riskier)	(higher is riskier) 	
Bank of New York Mellon	(BK)		96.5%			31.2%		 -0.1%
SVB Financial Group	(SIVB)		93.9%			94.4%		-53.9%
State Street		(STT)		91.2%			40.1%		 -1.8%
Signature		(SBNY)		89.7%			93.3%		-39.2%
Northern Trust		(NTRS)		83.1%			54.5%		 -3.1%
Citigroup		(C)		77.0%			64.6%		  4.3%
HSBC Holdings		(HSBA)		72.5%			47.4%		 11.9%
First Republic Bank	(FRC)		67.7%			110.6%		-69.1%
East West Bancorp	(EWBC)		65.9%			91.1%		-13.9%
Comerica		(CMA)		62.5%			72.8%		-36.6% 

Financial institution	Deposits not insured by the FDIC
Signature Bank			90%
SVB				88%
Citigroup			85%
First Republic			68%
JPMorgan 			59%
BNY Mellon			56%
Citizens Financial		49%
KeyCorp				47%
PNC				46%
Truist				46%
M&T Bank			45%
Fifth Third 			42%
Bank of America			33%
Goldman Sachs			33%
Huntington Bancshares		33%

Leading Wall Street economist Nancy Lazar discusses the resilience of the U.S. economy, despite several canaries in the coal mine examples of financial strain. Lazar shares her insights on why the economy is holding up better than expected and what we can expect moving forward, including the impact of the Federal Reserve’s efforts to slow down the recovery.

How worried should the average person be about news that San Francisco’s First Republic Bank is teetering on the brink, following on the heels of Santa Clara’s Silicon Valley Bank, which imploded last week? The bigger issue is whether the bank crisis will continue to spread, and how it could ripple into the economy — for instance, by making it harder to get loans, spurring still more layoffs, and even tipping the country fully into a recession.
Most experts think that we’re still far from dire consequences, although there could be more short-term pain ahead.
“For the vast majority of people, this mini crisis is going to pass, and we’re all going to have many other things to worry about in our professional and personal lives,” said Ross Levine, a finance professor at the Haas School of Business at UC Berkeley. Still, he said, “This is a very uncertain time.”
Darrell Duffie, a Stanford finance professor, was also sanguine: “The most likely scenario is that the economy will be fine because there won’t be a major problem in the banking system,” he said. “There might be some mergers and some problems at other banks. But I think it’s most likely that after one or two more banks have had to be rescued, whether by merger or similar treatment, it will stop there.”
Why? “Because the government will do its darndest to make sure this won’t lead to significant contagion,” Duffie said. “There’s every sign the government means business. The speed and size of its actions so far are commensurate with putting a stop to this.”
Those actions included the extraordinary steps of agreeing to backstop all Silicon Valley Bank deposits, even above the insured limits, and getting 11 big banks to deposit $30 billion into First Republic to signal confidence and help keep it afloat. In addition, the Federal Reserve is ensuring that banks have plenty of funds on hand by making money available to them on “terrifically generous” terms, he said.
But not everyone was optimistic- John Lonski, former chief economist at Moody’s Investors Service and founder of the economic/market research firm Thru the Cycle, thinks that lots of smaller and regional banks could be consolidated or collapse, as happened in the savings and loan crisis, which triggered the failure of about 1,000 banks from 1986 to 1995.
He thinks cascading effects this time could include banks tightening credit — which could make it harder for people to get mortgages or credit cards, and for businesses to get loans. And that could lead to an even worse outcome.
“That credit crunch (could) finally push the U.S. economy into this long-expected recession,” he said. That would mean more layoffs, he said, particularly of middle-aged and older workers, who have higher salaries.
Anastassia Fedyk, an assistant professor of finance at Haas, weighed in midway between the upbeat and downbeat views: “We are in a contagion spiral, going from Silicon Valley Bank to First Republic,” she said. “It’s speculation at this point about how much more damage we’ll see spilling over to others.”
But, she cautioned, the domino effect could be real if investor confidence continues to sink. “We’re already on the second domino,” she said. “The regulatory responses were enough to stop some of the fallout from SVB, specifically. All those exposed deposits were protected, but not enough to quell fears that something similar might happen with similarly exposed banks like First Republic.”
Although she thinks a recession “is in the realm of feasibility,” it’s still early, and the government has a lot more tools at its disposal to stem the risk, she said.
All eyes are likely to be on the Federal Reserve next week as it meets to decide whether to continue raising interest rates to fight inflation, or press pause on its campaign, Levine said.
“They face an excruciatingly difficult decision,” he said. “They need to assess the vulnerabilities in the banking industry. If they assess there really are no systemic vulnerabilities, that this is just a few small banks, then they are likely to choose to continue with (raising rates). If they see other risks, risks they view as genuine or (that) could induce banks to restrict credit — even if the Fed views banking as very sound — then they might decide to pause the raising of interest rates.”
Duffie thinks the Fed is less likely to raise interest rates than it otherwise would have done. The banking events themselves could cause credit to tighten, thereby lowering inflation, he said. “It’s a shifting of probabilities from the Fed pushing on inflation and therefore taking a risk of recession to this brewing problem in the banking system having a similar effect on credit provision,” he said.
“Given the uncertainties, pausing for one meeting cycle could be very prudent,” Levine said. “Markets are obviously very sensitive on banks now. Waiting to tighten credit might give everything a chance to calm down.”

Banks are teetering as customers yank their deposits. Markets are seesawing as investors scurry toward safety. Regulators are scrambling after years of complacency.
The sudden collapses of Silicon Valley Bank and Signature Bank — the biggest bank failures since the Great Recession — have put the precariousness of lenders in stark relief. The problem for SVB was that it held many bonds that were bought back when interest rates were low. Over the past year, the Federal Reserve has raised interest rates eight times. As rates went up, newer versions of bonds became more valuable to investors than those SVB was holding.
The bank racked up nearly $2 billion in losses. Those losses set off alarms with investors and some of the bank’s customers, who began withdrawing their money — a classic bank run was underway.
Even before SVB capsized, investors were racing to figure out which other banks might be susceptible to similar spirals. One bright red flag: large losses in a bank’s bond portfolios. These are known as unrealized losses — they turn into real losses only if the banks have to sell the assets. These unrealized losses are especially notable as a percentage of a bank’s deposits — a crucial metric, since more losses mean a greater chance of a bank struggling to repay its customers.
At the end of last year U.S. banks were facing more than $600 billion of unrealized losses because of rising rates, federal regulators estimated. Those losses had the potential to chew through more than one-third of banks’ so-called capital buffers, which are meant to protect depositors from losses. The thinner a bank’s capital buffers, the greater its customers’ risk of losing money and the more likely investors and customers are to flee.
But the $600 billion figure, which accounted for a limited set of a bank’s assets, might understate the severity of the industry’s potential losses. This week alone, two separate groups of academics released papers estimating that banks were facing at least $1.7 trillion in potential losses.

Midsize banks like SVB do not have the same regulatory oversight as the nation’s biggest banks, who, among other provisions, are subject to tougher requirements to have a certain amount of reserves in moments of crisis. But no bank is completely immune to a run.
First Republic Bank was forced to seek a lifeline this week, receiving tens of billions of dollars from other banks. On Thursday, the U.S. authorities helped organize an industry bailout of First Republic — one of the large banks that had attracted particular attention from nervous investors.
The troubles lurking in the balance sheets of small banks could have a large effect on the economy. The banks could change their lending standards in order to shore up their finances, making it harder for a person to take out a mortgage or a business to get a loan to expand.
Analysts at Goldman believe that this will have the same impact as a Fed interest rate increase of up to half a point. Economists have been debating whether the Fed should stop raising rates because of the financial turmoil, and futures markets suggest that many traders believe it could begin cutting rates before the end of the year.
On Friday, investors continued to pummel the shares of regional bank stocks. First Republic’s stock is down more than 80 percent for the year, and other regional banks like Pacific Western and Western Alliance have lost more than half their values.
Investors, in other words, are far from convinced that the crisis is over.