Where does responsibility for the banking crisis of spring 2023 lie? What missteps did now-failed banks make? What did the Fed get right? What did it get wrong? How has the banking crisis impacted costs? Lending? Businesses? Community banks? Can community banks recover? Will we see more regulation of banks? What about the shadow banking system, including crypto?
On May 22, I had the honor of participating in a Cohen Circle webinar titled “When Banks Fail: Navigating the Aftermath from SVB to First Republic.” We touched upon these questions and more. The webinar took the form of a panel discussion, deftly moderated by Jewelle Bickford, a retired global partner at Rothschild NA. Fellow panelists were Betsy Cohen, a three-time bank founder and serial investor, and Abby Joseph Cohen, a Columbia Business School professor and retired Goldman Sachs partner.
The Cohen Circle has made the recording of the webinar and the transcript available on the Cohen Circle website at this link: https://cohencircle.com/insight/webinar-when-banks-fail. The discussion was a fascinating hour, and I invite readers to watch, listen, or read — and join the conversation.
We closed with a discussion of the debt ceiling crisis, which, though now resolved, will remain a timely subject until the day when politicians stop restaging their costly debt ceiling drama, which Abby aptly terms “theater of the absurd.”
Kotok note to readers: we are still paying the price of this politically induced debt crisis by having a few basis points of borrowing cost added to trillions in US dollar denominated debt. I’m working on this estimate now. Preliminarily, we found that the cost is diffuse, but it does exist.
We hope readers enjoy the seminar recording. Many thanks to Betsy Cohen for inviting me to participate in this discussion.
David R. Kotok
Chairman & Chief Investment Officer
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