US banks continue facing severe financial pressures, with First Republic’s failure now being followed by intensified pressure on PacWest, Western Alliance and others previously thought to be healthy. A key driver is banks’ exposure to falling commercial real estate values, driven in part by the rise in working from home and reduced demand for commercial office space.
The scale of the growing banking crisis is raising concerns about a larger financial meltdown that could pull the rest of the economy down. The New York Times reports the three recent large failed banks had a total of $532 billion in assets (First Republic, $213 billion; Silicon Valley Bank, $209 billion; Signature Bank, $110 billion.) That’s bigger than the $526 billion “held by the banks that collapsed in 2008 at the height of the global financial crisis.”
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