Outlier Institutions

Almost a year ago, Credit Suisse, a globally systemic bank with $540 billion in assets and the second-largest Swiss lender, founded in 1856, failed and was sold to UBS. In the United States, Silicon Valley Bank, Signature Bank and First Republic Bank failed at around the same time amid Federal Reserve interest rate hikes to contain inflation. With a combined $440 billion of assets, these were the second, third, and fourth biggest bank resolutions since the Federal Deposit Insurance Corporation was created during the Great Depression.

This banking turmoil represented the most significant test since the global financial crisis of ending too-big-to-fail—whereby a systemic bank can be resolved while preserving financial stability and protecting taxpayers. 

So, what’s the verdict? In short, while significant progress has been made, further work is required.

See the full blog post here.