For this reason, this is actually big news. Small banks are the back bone of the US financial system. They are conservative where big ones are not. They are historically the ones that keep afloat.
Too early to call, but this might be a signal of things to come.
Small banks are less regulated than large ones, as a result of lobby from them to loosen the rules so that they can eek out some profits using less-conservative strategies. They also tend to serve localized and correlated customers, so local events can have an outsized impact on them, versus big banks that are widely diversified.
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For this reason, this is actually big news. Small banks are the back bone of the US financial system. They are conservative where big ones are not. They are historically the ones that keep afloat.
Too early to call, but this might be a signal of things to come.
That’s literally the opposite of the truth.
Look at the failed bank list: https://www.fdic.gov/resources/resolutions/bank-failures/fai...
Small banks fail. Big banks don’t. If anything this year is abnormal in that big banks have failed.
Small banks are less regulated than large ones, as a result of lobby from them to loosen the rules so that they can eek out some profits using less-conservative strategies. They also tend to serve localized and correlated customers, so local events can have an outsized impact on them, versus big banks that are widely diversified.