Regional banks face big hurdles a year after SVB collapse

Silicon Valley and Signature in March 2023 and First Republic in May – put a spotlight on how lenders managed risks to assets and liquidity as the Federal Reserve raised interest rates aggressively to bring surging inflation under control. Now that the Fed has stopped raising rates but has signaled cuts may not come for another several months, investors have shifted their focus to the potential for customers to pull their deposits in times of stress, while gauging lenders' exposure to the troubled commercial real estate (CRE) sector. "The banking industry needs to make sure it has a strong hold on its access to liquidity, conduct in-depth deposit stress testing, and ensure it can withstand significant stress," said Ryan Nash, banking analyst at Goldman Sachs.