Bank fragility is tied to the type of assets held on balance sheets being worth less partly because of rising interest rates
A customer walks past an ATM outside of a First Republic Bank branch in Manhattan Beach, California, on March 13, 2023.
Patrick T. Fallon/Agence France-Presse/Getty Images
A new academic study on 2023 bank fragility concludes that 186 U.S. banks remain vulnerable to a run on deposits that doomed Silicon Valley Bank, Signature Bank and Silvergate bank in the past week.
The paper by four professors aconcludes that the U.S. banking system’s market value of assets is $2 trillion lower than suggested by their book value of assets accounting for loan portfolios held to maturity.
“Marked-to-market…
