This is the March edition of Edison Group’s Insight. They open with a strategy piece by Alastair George, who notes that 2023’s rally in global equities has proved unsustainable in the face of cracks in the US banking system. The weakest link in the financial system during this period of tighter monetary policy has been uncovered. However, the collapse of Silicon Valley Bank (SVB) seems a special case of mismanagement rather than a harbinger of a systemic crisis in the banking system. Furthermore, while Credit Suisse has been forced into the arms of UBS, error-prone management featured more strongly in the market dynamics than actual capital ratios. Although all banks are subject to the risk of depositor flight, the situation is not at all similar to that of 2008, according to Edison.
