Banking Problems May Be Tip of Debt Iceberg

banking problem
banking problem

‘Shadow banks’ have grown rapidly and, like banks, are exposed to risk from higher interest rates

The biggest question facing the economy lately has been: How bad will the banking turmoil be? Though two U.S. banks failed a month ago, and a third is still struggling, emergency lending by the Federal Reserve seems to have prevented broader harm.

The next question should be: Will it spread beyond the banks? That is because the collapse of Silicon Valley Bank a month ago, which touched off this bout of turmoil, was a symptom, not a cause, of broader forces at work in the financial system and the economy.