The crisis of small and medium-sized banks in the United States continues - how will the follow-up risks evolve?

1. Small and medium-sized banks in the United States are the most vulnerable in the banking system and face common macro risks.

2. Crisis incidents frequently occur due to changes in the macro environment, relaxation of financial supervision, and weak management foundations of small and medium-sized banks.

3. Although the crisis of small and medium-sized banks is difficult to trigger a systemic crisis, dealing with the problem may affect the efficiency of financial competition and increase the hidden danger of "too big to fail."

Since March, four U.S. banks have failed or been acquired, showing small and medium-sized banks' vulnerability and macro risk. These banks have unique business models and vulnerabilities, such as Silicon Valley Bank, First Republic Bank’s robust customer structure, poor deposit stability, and Signature Bank and Silvergate Bank’s involvement in high-risk encryption industries. Changes in the macro environment, deregulation, inherent vulnerability, and weak risk control capabilities of commercial banks have jointly led to the crisis. The pressures faced by small and medium-sized banks include outflow pressure on the liability side, high-interest rates, and credit risks. Although the probability of a systemic crisis is low, the hidden dangers of high industry concentration and "too big to fail" have increased.