Episode 485: Canaries in the Banking Coal Mine?

The banking industry is entering a perilous new phase, and new developments are happening quickly so we’re dropping this episode early. The second largest bank failure in history came suddenly with Silicon Valley Bank being shut down by regulators on March 10. This comes just two days after Silvergate bank announced it was closing “voluntarily”.

Joining our resident recovering banker and host JP Nicols are Kiah Haslett, managing editor at Bank Director, and John Maxfield principal at Maxfield on Banks, who has written extensively on the history of banking and bank failures. They examine where this all fits in the history of bank closures, why it happened, and where the risks and opportunities are from here. John argues that while scarcity is the primary constraint in most industries, for banking it’s abundance. Was a decade and a half of low to zero interest rates too much of a good thing? What’s the role of Fed interest rate hikes?

JP and John debate if banks being too boring is riskier than being too “innovative”, Kiah muses about the role of faster money movement, and she’s ready for more hot wings after all of these hot takes, but we’ll save that for a show that Jason hosts.