The Risks of a Credit Crunch

I think the banking turmoil is Turned out to be quite a low risk and quite a small factor in the economy for what it's worth. The main way we would have a banking crisis in this country is If deposits became really unsticky Um otherwise the franchise value of banks actually goes up when interest rates go up Higher interest rates mean they can lend money at a higher rate They don't pass that interest rate increase along nearly as much to their uh Their depositors and so those interest rates can really help the banks.