The Fragility of Banks and the Cost of Bailouts.

As three US banks go down and a fourth teeters, comparisons to the 2008 banking crisis have become harder to ignore. While the odds of a recession are up, authorities are better equipped to deal with stress in the financial system, and the largest banks are stronger than they were then. However, the pace at which events are unfolding and new potential problem areas, such as high inflation and the boom in the opaque world of private credit, make it difficult to tell the difference between investor courage and complacency. The speed with which dominoes fall when faith breaks is one of the signature properties of bank stress.