Stay Calm - What happened to banks/consumers
The message from the SVB CEO was not enough.
It took a series of actions from the US president, the Treasury, multiple regulators and the banking industry to get the US banking system stabilized.
What is the impact on main street consumers?
📌 Interest rate
It is estimated the banking crisis is equivalent to a 100 bps rate increase. Thus consumers can have some breathing room with a slowdown/pause of the rate hike.
The Spring housing market has shown some signs of life.
📌 Access to credit
Banks will be careful to extend credit. This will lead to reduced credit access for marginal borrowers, which has been underway as credit performance is normalizing.
📌 Cost of safety
The safety of the banking system does not come without a cost. Though not directly borne by taxpayers, the FDIC cost will be covered by bank customers.