Bank Failures Contribute To Increased Restructuring Activity
April 24, 2023DownloadsDownload Article
In this article for Law360, FTI Consulting's Michael Eisenband discusses the recent bank failures' underlying causes, common threads, impacts and responses.
This article from Law360 was published on April 18th 2023. The entire publication is available at: https://www.law360.com/articles/1596485/bank-failures-contribute-to-increased-restructuring-activity
“The sudden and spectacular failure of Signature Bank, Silvergate Bank and Silicon Valley Bank in early March pushed all other business stories off the front pages and had financial markets anxiously asking where the fallout would stop. As unique as the underlying causes of each failure were, at their core, these were all good old-fashioned bank runs triggered by liquidity issues.
The blame game has already begun, be it overexposure to crypto businesses, overreliance on venture capital-funded startups, asset-liability duration mismatch, inadequate internal risk monitoring, lax regulation — or any combination of these factors.
These abrupt bank failures will be fodder for hand-wringing, finger-pointing and feature-length stories for months or years to come even if the story ends here — a far-from-certain outcome. This saga might even have big-screen appeal, as do most storylines where greed, hubris and failure collide.”
This article was reprinted with permission from Law360©
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