David R. Kotok quoted in...
Regional Banks Still Shaky Six Months After Major Collapses
By JASON COHEN - September 5, 2023
Regional lenders are still struggling and face bleak outlooks six months following the start of the 2023 bank crisis, according to economists.
Silicon Valley Bank and Signature Bank collapsed in March to start the crisis, marking two of the largest bank failures in U.S. history. Since then, America’s biggest bank JPMorgan Chase’s stock has risen in value, and the institution notched record earnings after acquiring First Republic Bank in May, the biggest bank that failed in the 2023 crisis, and the second-largest collapse ever.
“There’s no question the [global systemically important banks, G-SIB] won and the middle-sized banks — let’s call that banks with between $50 billion and $250 billion in assets — were the losers,” Cumberland Advisors Chief Investment Officer David Kotok told CNN Business.
However, JPMorgan Chase and other large institutions helped prevent the contagion from spreading, Kotok told the DCNF.
“The United States was facing a banking system contagion. Money was flying out of banks,” Kotok told the DCNF. The money went to “fortress banks like JPMorgan Chase, and the other [biggest banks] … the JPMorgan fortress institutions played a critical role because they could take the incoming deposits because they were viewed as fortress safe.”
“We didn’t have a contagion meltdown, and we sure as hell don’t want one,” Kotok added.
JPMorgan Chase did not immediately respond to the DCNF’s request for comment.