The bank beatings will continue until morale improves

This is the Theme of the Week edition of Bloomberg Opinion Today, a digest of our top commentary published every Sunday. Follow us on Instag [Bloomberg]( This is the Theme of the Week edition of [Bloomberg Opinion Today](, a digest of our top commentary published every Sunday. Follow us on [Instagram](, [TikTok](, [Twitter]( and [Facebook](. The ongoing bank crisis has started to register in places other than Wall Street and Silicon Valley. The last time Americans were [this worried]( about the money they had entrusted to their financial institution of choice was … 2008. Source: [Gallup]( Whether that anxiety is well placed is [a good question]( — and it doesn’t mean that [depositors at beleaguered regional banks]( are actually taking out their money — but another wild week in [banking has investors still freaking out (or not?)](. As Matt Levine puts it, [bank stocks look worse than the actual banks do](. While regional banks like PacWest and Western Alliance aren’t out of the woods, their problems aren’t quite the same as those of the failed First Republic Bank and Silicon Valley Bank, writes Paul J. Davies. But [falling share prices](, he says, “make depositors more skittish, funding costs rise further, profitability worsens and around it goes again.” Bloomberg Opinion’s banking analysts are keeping a close eye on the crisis. Here’s what they had to say about the past week. [JPMorgan, First Republic and the Curse of the Second Best](: “The inevitable assessments of First Republic’s failure are also likely to point to significant lapses in bank supervision and regulation — the type of failures that were detailed in a report by the Fed that, refreshingly and encouragingly, saw the central bank finally take ownership of a mistake and seek to learn from it. Unlike other major central banks, it had repeatedly failed to do so when it comes to monetary policy.” — Mohamed A. E-Erian [You Don’t Want to Know How Banks Make Their Sausage](: “The Federal Reserve [published]( a 118-page post-mortem of its relationship with Silicon Valley Bank and [uploaded]( to its public website 25 previously confidential letters and reports its supervisors had sent to the bank. The Federal Deposit Insurance Corp. published a more slimmed-down version of its dealings with Signature Bank. One thing they reveal is how haphazardly these institutions were run compared with the super-professional show they put on for investors.” — Marc Rubinstein [Powell’s Narrative Revives Talk of a Pivot](: “News that another bank is in trouble does serve as confirmation that the problem is still around. The drumbeat for a rapid expansion in deposit insurance will only grow louder.” — John Authers [Banking Is Heading Back to the Days of Free Toasters](: “As banks once again struggle to attract cash to their coffers, it’s likely we’ll begin hearing various fixes to the problem. Fine. But this time around, a little awareness of the deeper history of the issue may go a long way toward preventing a repeat of past mistakes.” — Stephen Mihm [If the Banking Crisis Offers One Lesson, Let It Be This](: “One great advantage of equity capital is its versatility. Supervisors will never be able to anticipate everything that could possibly go wrong. The next shock will be different. Managers will take ill-advised risks. But as long as banks have ample capacity to bear the inevitable losses, the financial system and the broader economy will be much more resilient.” — Bloomberg’s editorial board Notes: To contact the author of this newsletter, email bsample1@bloomberg.net. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Bloomberg Opinion Today newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](