March 20, 2023, New York, NY — Arthur Tetyevsky, Financial Strategist at Seaport Global Holdings, worked in a similar role but at HSBC during the 2008 financial crisis.
Many types of crises have been predicted by the financial community in the aftermath of 2008. In reality, they are exceedingly rare in markets. And yet, with three US banks down, a fourth teetering and the government-brokered acquisition of a fifth — and much larger — institution in Europe, the comparisons to 2008 have become a little harder to ignore.
Bank Crisis Survivors Remember How Fast the Dominoes Can Fall. In 2008, banks were more leveraged while regulators had much less experience dealing with systemic stress, said Arthur Tetyevsky. At the same time, because the market is now dominated by passive funds, it’s not as easy to get out of big positions.
“The most important lesson that was learned back then is that a problem requires a quick response; backing of the regulators, backing up of supervisors,” he said. “I’m seeing a response rate that’s much, much quicker today compared to 2008.”
Source: Justina Lee, Katie Greifeld, Vildana Hajric, Isabelle Lee, Bank Crisis Survivors Remember How Fast Dominoes Can Fall, Bloomberg News (Mar. 20, 2023).
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Joan Nash
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Seaport Global Holdings LLC
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jnash@seaportglobal.com