The Lingering Impact of Banking Crises on the Economy.

The recent banking crisis has shown that governments are acting swiftly and aggressively to strengthen the overall system rather than leaving it weak. Credit Suisse and Silicon Valley Bank were both effectively sold for a negative sale price, with shareholders and some bondholders losing out. Governments are now more willing to support private sector banks, with regulators inflicting losses on bondholders to demonstrate that credit risk is something investors need to care about. The post-GFC regulatory architecture created "crumple zones" around banks that were designed to hurt shareholders and bondholders while protecting depositors and the system as a whole, and those zones seem to have worked exactly as designed.