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EssentialThe Essential Conversation

A Credit Update: Will Some Banks "Starve to Death"?

Featuring Chris Whalen and Ed Harrison

Mar 11, 2021 • 40 minutes

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Essential

The Essential Conversation

A Credit Update: Will Some Banks "Starve to Death"?

Chris Whalen returns to Real Vision to share with Ed Harrison his strategic update on the U.S. banking system.

Featuring Chris Whalen and Ed Harrison

Mar 11, 2021 • 40 minutes

Chris Whalen, chairman of Whalen Global Advisors, returns to Real Vision to share with Real Vision managing editor Ed Harrison his strategic update on the U.S. banking system. Whalen argues that the biggest risk to banks is not credit risk but the Federal Reserve, which has compressed banks' net interest margins and reduced their earnings power. Whalen notes that this greatest threat is for large banks, and he finds much to admire in resilient small banks such as Bank of the Ozarks ($OZK) or Fifth Third Bankcorp ($FITB), which occupy particular niches that allow them to command a much higher spread on their loans than their larger-sized competitors. Filmed on March 4, 2021. Key learnings: Whalen argues that potential actions by the Federal Reserve such as yield curve control or "Operation Twist" pose a greater threat to banks as a whole than does credit risk. Whalen does, however, see looming problems in banks' exposure to commercial credit such as leveraged loans and commercial real estate. Whalen thinks that consumer exposure, such as credit cards and residential mortgages will continue, to fare well. Show More

The Essential Conversation is the world's premier financial-market-focused conversation series. The smartest people in markets, finance, economics, and business engage in deep-diving discussions about the global macro landscape, generating actionable takeaways that can help your decision-making process. Tune in to peer-to-peer conversations between the brightest minds in the investing world, and tune up your portfolio.

More Episodes

The Essential Conversation is the world's premier financial-market-focused conversation series. The smartest people in markets, finance, economics, and business engage in deep-diving discussions about the global macro landscape, generating actionable takeaways that can help your decision-making process. Tune in to peer-to-peer conversations between the brightest minds in the investing world, and tune up your portfolio.

More Episodes

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