Brandon Berger

The regional banking system is at risk. SVB's depositors' bad weekend woke up uninsured depositors everywhere. The rapid rise in rates impaired assets and drained deposits. Zeroing out shareholders and bondholders massively increased the banks’ cost of capital. CRE losses loom. Meanwhile, higher-yield, more user- friendly alternatives beckon @Apple. The @FDICgov failure to update and expand its insurance regime has hammered more nails in the coffin. FRB would not have failed if the FDIC temporarily guaranteed deposits while a new guarantee regime were created. Instead, we watch the dominoes fall at great systemic and economic cost. Banking is a confidence game. At this rate, no regional bank can survive bad news or bad data as a stock price plunge inevitably follows, insured and uninsured deposits are withdrawn and 'pursuing strategic alternatives' means an FDIC shutdown over the coming weekend. And there is no incentive to bid until Sunday after the failure. The GSIBs have an unfair competitive advantage as too big to fail means only their uninsured depositors can sleep soundly. Until the playing field is leveled, the regional banks are at grave risk. Confidence in a financial institution is built over decades and destroyed in days. As each domino falls, the next weakest bank begins to wobble. Until investors are rewarded for betting on a wobbling bank, there will be no bid, and the best sale is the last price. We are running out of time to fix this problem. How many more unnecessary bank failures do we need to watch before the FDIC, @USTreasury and our government wake up? We need a systemwide deposit guarantee regime now.