by Kavan Choksi

The year began in the middle of a historic rate hiking cycle aimed at taming inflation. The stress of higher rates seemed to portend an inflection point in the economy. In the first quarter, a series of bank failures threatened system-wide contagion. Tremors in the banking system fueled recessionary fears, which were amplified by slowing US GDP growth. The soft landing eyed by the Federal Reserve and hoped for by optimistic investors started seeming less likely.

By Kavan Choksi

Sometimes business decisions lead to success, and a bank’s profit grows. Other times, business decisions, coupled with bleak economic conditions, result in losses. In banking, such losses can lead to a sudden drop in confidence among the bank’s customers, the depositors demand their money, and the run on the bank causes a quick collapse.