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Banking Tremor, Not Crisis
- The recent banking issues were a tremor, not a systemic crisis.
- The affected banks were caught off-side due to poor supervision, not systemic issues.
Credit Crunch Coming
- The banking system is undergoing a major transition due to rapidly changing interest rates.
- Smaller banks with higher funding costs and concentrated loan books will face challenges.
Central Bank Accountability
- Central banks must be held accountable for their mistakes to maintain political independence.
- This accountability preserves their ability to make policy without congressional approval.