Memorial Day Special: Bank Failures Are Not Going Away
The combined assets of banks that have failed since 2023 total $538 billion. That figure is equivalent to 76% of the $705 billion in combined assets of banks that failed between 2007-2020. Neither figure includes the assets of banks that were bailed out in 2008, 2009, nor the BTFP bailout program that ran from March 2023 - March 2024.
The banks will carry the large unrealized loss positions seen in Chart 2 until rates meaningfully come down and reinflate the bond market. Until such time, more banks will fail.
This means tighter credit and a slower economy.
