#53 Banks: The Final Chapter (For Now)

Hi Everyone! Happy weekend. Hoping for calmer times and weeks ahead. 👋

Welcome to the new members of @TheFundCFO crew! Every M/W/F, we bring you actionable tools, real-world experiences, and insider insights for #VC CFOs and fund managers, #LP investors, and general industry enthusiasts/people who want to learn :).

Banks: The Final Chapter (For Now)

Bank news has dominated the headlines and mindshare of VC GP’s, CFO’s, and fund finance professionals over the past week. This is the third and final chapter (for now) of our commentary on banks as we try to get back to our normal programming. 😎

We previously shared thoughts from Eddie Duszlak, who runs Virtuent, a systematic, market-neutral hedge fund focused on small-cap banks (#52 Bank Expert Analysis). This all started with the Bank Blockbuster (#51) on March 10th.

As of the market closing on Friday, March 17th at 4pm ET, the WSJ.com headline noted that “Stocks Decline Broadly After First Republic (Bank) Cuts Dividend.” Additional bank headlines covered the home page:, including “SVB Financial Files for Chapter 11 Bankruptcy Protection” and “Bank Failures, Like Earlier Shocks, Raise Recession Odds.”

These capture the broader market sentiment after another challenging week that saw almost all stock gains wiped out from 2023.

What’s Coming Next & Things to Consider Next Week

“Fed poised to approve quarter-point rate hike next week, despite market turmoil” CNBC

“Trouble at SVB and other lenders will test the Fed, and banking, business and consumer confidence” WSJ

Banking confidence - where does it go from here? “Banking is a confidence trick. You put money in the bank today because you are confident you can take it out tomorrow; to you, a dollar that you have deposited in the bank is just as good — just as much money — as a dollar bill in your wallet. If you show up at the ATM at any time of day or night, you expect it to give you your dollars.”

“But the bank doesn’t just put your dollars in a box and wait for you to take them out; the bank uses its depositors’ money to make loans or buy bonds, and just keeps a little bit around for people who need cash. If everyone asked for their money back tomorrow, the bank wouldn’t have it. But everyone is confident that, if they ask for their money back tomorrow, the bank will have it. So they mostly don’t ask for it, so when they do, the bank does have it. The widespread belief that banks have the money is what makes it true.” Matt Levine, Money Stuff

That’s all for today folks! Thanks for your support and spreading the word! Share this on Twitter or LinkedIn to help grow “the crew!”