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2023 Déjà vu

Mass layoffs, rampant inflation, uncertainty in the banking and technology sectors. These issues have been in the headlines lately and there has been a lot of talk of the economy being in, or heading towards, a recession. The war in Ukraine continues, with Russia appearing to buy drones from Iran and more weapons from South Africa. In the U.S., immigration continues to affect everyday life, especially in border towns and sanctuary cities. Agricultural regions, businesses in the service and construction industries, all rely heavily on the immigrant skillforce. It will be an interesting election season next year, to say the least.

So what is going on in the banking sector? As interest rates have risen, regional banks are facing higher debt costs. In March, the failures of Signature Bank and Silicon Valley Bank opened everyone’s eyes to the realities of the current situation. The recent news of First Republic Bank re-inforced and really cast light on the industry-wide problem. In response, investors and depositors shifted their relationships to the largest U.S. banks. Some years back there was a movement towards smaller lenders and community banks; the latest activity points to a major reversal of this trend. Which is unfortunate because when we bank locally, we make a positive economic impact locally. Similar to when we shop local, it makes a huge difference.

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