Authored by Simon White, Bloomberg macro strategist,

US regional banks' deposits recently made new highs, exceeding the level prior to SVB's collapse. But that's far from an all clear. Exposure to commercial real estate continues to rise and delinquencies on the underlying loans is mounting. Hold-to-maturity bank portfolios are losing more money as yields increase, while small banks' shares are weakening, significantly underperforming those of larger banks. Those conditions also preceded SVB's bankruptcy last March.

The Federal Reserve has become adept at putting out fires in recent years. However, like the now-banned magic candles that re-lit after being blown out, fires can reignite. A full-scale banking crisis is unlikely, especially among the large banks, but there remain sufficient fragilities in the regional banking sector that could still deliver a nasty shock with reverberations across markets.