On Powell, NYCB and regional banks

Good on the outside, bad on the inside

From Tuomas Malinen’s Forecasting Newsletter.

Issues discussed:

• The anniversary of the failure of the Silicon Valley Bank (SVB) is upon us.

• Bright spots in the U.S. banking sector are over-shadowed by the looming commercial real estate losses.

• The possible ‘liquidity crunch’ is approaching, while the Federal Reserve is to be ‘on hold’ in its March meeting.

I am currently writing the scenarios for the geopolitical future of Europe, which will be published next week. However, I wanted to first comment on the recent developments in the U.S. regional banking sector, noted also by the Chair of the Federal Reserve, Jerome Powell.