Two Months After SVB, So Far So Good

Only one more bank has failed in the two months following Silicon Valley Bank and Signature Bank. Forced discount window borrowing has now been retired, and the new Bank Term Lending Program has kicked in as a version of QE to liquify banks with marked-down Treasuries and MBS. Bank lending is up since SVB. Consumer lending has steadily grown, led by revolving credit, showing that even if banks are hesitant to lend consumers are not hesitant to borrow. Real estate lending is higher after a dip. C&I loans are down, but have recovered from the worst. The feared credit hard-freeze has not materialized, and increased lending allows banks to rehabilitate their crushed net interest margins. We stand by our no-landing call.