Silicon Valley Bank's collapse has made the Fed's job way harder, top economist says
Sløk pointed out that the banks lend around two-fifths of all money borrowed by Americans – so if the crisis causes them to pull back from that market, there'll be an economic slowdown because people have less to spend.
"What is really the major issue here, in my view, is that we just don't know now what is the behavioral change in terms of lending willingness in regional banks," he said. "Given that regional banks make up 30% of assets and roughly 40% of all lending, that means that the banking sector now has such a significant share of banks that are now really at the moment thinking about what is going on," Sløk added.
The banking crisis has led to some of Wall Street's top names raising alarm bells about the Fed – which is still upping borrowing costs in a bid to tame inflation. Investors have trimmed their view of how much the US central bank will raise interest rates at its meeting next week, according to
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