The Ripple Effect of the Banking Crisis on the Economy.

The US banking system may have stabilized after Silicon Valley Bank's failure, but economists warn that fallout from the collapse could linger in the months ahead. Banks are already tightening up on lending, and a shift away from smaller banks towards bigger ones would restrict the availability of credit for small businesses and real estate investors. Businesses would have a more difficult time accessing cash, which could lead to a credit crunch and crimp economic activity. Economists at Goldman Sachs say that tighter lending could result in a drag of as much as a half-percentage point on US growth over the year.