Article Image

IPFS News Link • Central Banks/Banking

Big Banks' Supremacy Set To Reassert Itself

• by Simon White

Perhaps counter-intuitively it has been the larger US banks that have been hit the hardest after the collapse of SVB and Signature bank.

Reasons cited have included greater exposure to Credit Suisse and expectation of more regulation on the way.

Systematic selling has also not helped as investors jettisoned bank stocks, fearing the crisis could be become systemic.

But there are several reasons to believe that larger banks will soon begin outperforming again.

Deposits at US banks at the aggregate level have fallen since last summer. Yet total bank balance-sheets have barely declined as banks ramped up their loan-to-deposit ratios (LTDRs).

However, digging under the surface, it has been the smaller banks who have done most of the lending.