Stocks have shrugged off the banking turmoil. Haven’t they?
Why the current buoyancy is deceptive
Bank failures are usually bad for business. A sickly banking system will lend less and at higher interest rates to companies in need of capital. A credit crunch will crimp economic growth and therefore profits. On occasion, a bad bank can blow up the financial system, causing a cascade of pain.
This article appeared in the Finance & economics section of the print edition under the headline “Deceptive buoyancy”
Finance & economics April 8th 2023
- The IMF faces a nightmarish identity crisis
- Chinese officials promise foreign investors greater access
- The Swiss rage about the demise of Credit Suisse
- Stocks have shrugged off the banking turmoil. Haven’t they?
- The rich world’s housing crunch is far from over
- Why economics does not understand business
From the April 8th 2023 edition
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