Why the crisis of confidence in regional banks is so difficult to stop

Denver These are names that, until recently, ranked “below” in the international financial scene: Pacwest, First Republic, Signature Bank. The US regional banks have slipped into a deep crisis of confidence since March.

Even if the situation has calmed down somewhat in the past few days, many experts fear that the turbulence is not over yet. Julian Wellesley, analyst at asset manager Loomis Sayles & Co., warns of a “chronic crisis” among small and medium-sized institutions. If Wellesley and other warners are correct, long-term damage to the US financial sector and the US economy as a whole looms.

For Warren Buffett, the matter has long been “crystal clear”: Banks that have bought long-term bonds and made large-scale loans in times of low interest rates would have problems if interest rates rose significantly. The 92-year-old star investor started throwing bank stocks out of his portfolio months ago.