• We flag three signs of a systemic banking crisis: contagion, credit losses, and official complacency
    • Contagion: to date, spillovers following Silicon Valley Bank’s collapse have been relatively limited, but instability can spread more quickly than ever in the digital era
    • Credit losses: we have not yet seen the full macro effects of Fed tightening — these could cause credit defaults and possibly spark a second round of concern about the banking system
    • Complacency: policymakers have taken swift, decisive action to address risks but there is always scope for a policy misstep
  • We see limited evidence of any of these signs flashing red

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