Aftermath of the Banking Crisis

The failure of Silicon Valley Bank in March 2023 triggered a global banking crisis that revealed underlying vulnerabilities in the financial system. Despite the initial shock, the aftermath of this crisis is still impacting the banking sector and the real economy, suggesting that the problems are far from resolved. Evidence, including changes in global markets and bank behavior, indicates that the economy has entered a period of stagnation, where growth is hindered and labor markets are struggling. This ongoing situation serves as a reminder that, while immediate crises may seem contained, the long-term effects can be pervasive and detrimental.