Note on Money Stuff: Regional Banks Don’t Feel Loved via Matt Levine

After 2008, there was a perception that the government was implicitly guaranteeing the biggest banks, and that this was bad; the reaction was to regulate the biggest banks more strictly, to try to prevent them from becoming bigger, and to favor smaller regional banks. After the 2023 crisis, there is a realization that the government is implicitly guaranteeing all of the banks . And if you are in that business anyway, you will prefer to guarantee a few big, well-capitalized, closely supervised banks rather than thousands of risky ones.

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FROM:

Matt Levine

Money Stuff: Regional Banks Don’t Feel Loved