Regional banks were back in vogue yesterday, with a feeling that the risk of a full-blown banking crisis had passed. Today, the pessimists (or perhaps the realists) were back, saying, “We’re still worried.”
Embodying this more cautious perspective on smaller banks was Jim Bianco of Bianco Research. “There are more chapters to be written in that story,” he said.
He pointed to the likelihood of a “bank walk,” not a “bank run,” where depositors steadily wake up to the fact they can earn far more in money market funds than simply parking cash in their local financial institution.