Banking crisis: has the city weathered the financial storm?
The financial storm appears to have abated, but no one’s ruling out more squalls along the way

It was perhaps inevitable that, after the shock collapse of Credit Suisse, attention would switch to another European bank with “a patchy record”, said Lex in the FT.
But Deutsche Bank withstood the tumult, albeit after losing 14% of its value in a morning – a measure of its rebuilt stability.
“The cause of the turmoil appeared to be a jump in the cost of insuring against a Deutsche bond default”, but even “pessimistic analysts struggled to doubt the bank’s financial resilience”. The likely culprit appears to have been “panic’s invisible hand”.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Deutsche stopped the domino effect and calm was restored. In America, the lender that started it all, Silicon Valley Bank, was sold off to its regional peer, First Citizens, with a “staggering” subsidy on Monday.
By Tuesday morning, traders had all but declared the banking crisis over.
‘A far slower burn’
Don’t speak too soon, said Jonathan Prynn in the Evening Standard. We tend to remember the “tumultuous climax” of the global banking crisis 15 years ago, and often forget that it was actually “a far slower burn”.
A full year elapsed between the first major UK drama – the run on Northern Rock in 2007 – and the final denouement, which saw the partial nationalisation of Lloyds, Halifax and Royal Bank of Scotland “to prevent Britain’s entire financial sector collapsing”.
This time may be no different. No one really knows where this “rolling series of banking crises” will end, said Jeremy Warner in The Sunday Telegraph.
“But what’s clear is that the main culprits are again our old friends the central banks” which, after belatedly recognising the danger of inflation, “slammed on the brakes with a tightening of unprecedented speed and quantity” – giving the system “no time to adjust to the new world order”.
‘US problems cause global recessions'
The turmoil is by no means over. What will be the next thing to go bang, asked Oliver Shah in The Sunday Times.
Arguably, any area “where leveraged assets bought near the top of the cycle face debt repayment deadlines”. Commercial property might well be a source of “landmines”.
The longer-run danger, said Jason Douglas in The Wall Street Journal, is the risk to global growth. “Turmoil in the US banking sector isn’t just a problem for the US. It also increases the risks of a global recession.”
Damage to the banking system will certainly prove “consequential”, said The Economist. But assuming we avoid another big shock, “it’s unlikely to push the world economy over the edge”.
There are forces working in the other direction too: the rebound of China; falling energy prices; disappearing supply chain bottlenecks. It’s easy to overdo the gloom. “Do not be surprised if the world economy’s unusual resilience continues.”
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
America's academic brain drain has begun
IN THE SPOTLIGHT As the Trump administration targets universities and teachers, educators are eying greener academic pastures elsewhere — and other nations are starting to take notice
By Rafi Schwartz, The Week US Published
-
Why is Musk targeting a Wisconsin Supreme Court race?
Today's Big Question His money could help conservatives, but it could also produce a Democratic backlash
By Joel Mathis, The Week US Published
-
How to pay off student loans
The explainer Don't just settle for the default repayment plan
By Becca Stanek, The Week US Published
-
Safe harbor: Gold rises as stocks sink
feature It's a golden age for goldbugs
By The Week US Published
-
What is the Mar-a-Lago accord?
Talking Point A Maga economic blueprint proposes upending the global financial system. Could it fly?
By The Week UK Published
-
Elon Musk: has he made Tesla toxic?
Talking Point Musk's political antics have given him the 'reverse Midas touch' when it comes to his EV empire
By The Week UK Published
-
Texas vs. Delaware: See you in court
Feature Delaware risks losing its corporate dominance as companies like Tesla and Meta consider reincorporating in Texas
By The Week US Published
-
Trade wars, explained
The Explainer Free trade is almost always good for any economy – so why is it so unpopular?
By The Week UK Published
-
What does the FDIC do?
In the Spotlight The Federal Deposit Insurance Corporation is now a 'Trump target'
By Joel Mathis, The Week US Last updated
-
Diversity training: a victim of the 'war on woke'
Talking Point More and more US companies have phased out corporate DEI initiatives, and the incoming Trump administration is likely to fuel the cultural shift
By The Week UK Published
-
Volkswagen on the ropes: a crisis of its own making
Talking Point The EV revolution has 'left VW in the proverbial dust'
By The Week UK Published