December 3, 2023

Chief executives at some of the largest banks in the United States were forced to address the elephant in the room as they reported first-quarter earnings on Friday morning: The regional banking crisis that brought Silicon Valley Bank and Signature Bank to ruin last month.

> Banking industry turmoil has added to risks of recessionary “storm clouds” on the horizon, said JPMorgan Chase CEO Jamie Dimon Friday in a release. He added that “the banking situation is distinct from 2008 as it has involved far fewer financial players and fewer issues that need to be resolved.”

Still, said Dimon, who leads the country’s largest bank, “financial conditions will likely tighten as lenders become more conservative, and we do not know if this will slow consumer spending.”

>“We are glad to have been in a strong position to help support the US financial system during the recent events that impacted the banking industry,” commented Wells Fargo CEO Charlie Scharf in a statement. “Regional and community banks are an important part of our financial system and are uniquely positioned to serve their customers and communities.”

> “I believe today’s crisis of confidence in the regional banking sector will further accelerate capital markets growth, and BlackRock will be a central player,” wrote BlackRock CEO Larry Fink on Friday.

“Increased financing through the capital markets will require the scale, multi-asset capabilities and excellence in portfolio construction that BlackRock consistently delivers across market cycles,” he said in a statement.

That means bad news for regional banks could be good news for BlackRock — the lack of trust in regional banks will drive more investment into capital markets and BlackRock is poised to benefit as that happens.

“Throughout our history, moments of market dislocation and disruption have served as inflection points for BlackRock,” he explained.

Regulators also hired BlackRock in early April to help the US government in the sale of the $114 billion in assets it collected from the collapse> Citigroup and PNC did not address the banking crisis in their releases, but will likely answer questions about how they’ve weathered the turmoil and what they see ahead at their first-quarter presentations, planned for 11 a.m. ET.


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