Recent data reveals that while the banking industry in the U.S. is facing significant challenges, executives are mentioning “credit tightening” more frequently in earnings calls than during the 2008 financial crisis. Additionally, Google Trends data indicates a surge in search queries related to bank failures and crises. The findings suggest that the U.S. economy is experiencing a period of instability and uncertainty, prompting concerns among market observers.
‘Credit Tightening’ Mentions on Company Calls Highlight Concerns Over the Stability of the U.S. Banking Industry
The U.S. economy is struggling with a trifecta of challenges: soaring inflation, steep interest rates, and a banking industry in disarray. Since Silvergate Bank’s announcement on March 8, 2023, that it would cease operations and liquidate its assets, the country has witnessed a string of significant bank failures. Silicon Valley Bank, Signature Bank, and First Republic Bank have all followed suit, marking the second, third, and fourth largest bank failures in U.S. history.
A report published on May 4, 2023, sheds light on the banking sector’s ongoing issues. According to the research, executives are increasingly using the term “credit tightening” during their earning calls. The report cites Bloomberg data, which reveals that the frequency of “credit tightening” mentions on company calls has surpassed the levels seen during the 2008 financial crisis. This trend is alarming for the banking industry, as it suggests that executives are struggling to manage credit risk and maintain profitability.
The banking industry is showing signs of caution, as evidenced by the increasing mentions of “credit tightening” on company calls. This trend is concerning, as it often leads to a negative impact on the economy. When banks become more cautious about lending money, it becomes harder for market participants to obtain credit, which can slow down economic growth. In addition to this, the report also notes that news stories alluding to “credit tightening” have reached record highs.
Google Trends Shows an Uptick of Searches Related to ‘Bank Failure,’ ‘Bank Crisis,’ and ‘Credit Tightening’
On March 19, 2023, Bitcoin.com reported that Google Trends data revealed a trend in search queries related to the banking industry. Searches for terms like “banking crisis” and “bank runs” had skyrocketed at the time. Current 30-day statistics show that the…
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