Why the Next Victim of the Banking Crisis Is Small Business | Stephanomics

The banking crisis that began in March continues to rapidly evolve. What started with the collapse of Silvergate Capital and Silicon Valley Bank went on to claim Signature Bank and push a vulnerable Credit Suisse into the arms of UBS. This week, another midsize California lender that couldn’t find its footing also dropped, as First Republic was acquired by JPMorgan.

In the first episode of this season, we catch you up on the turmoil in the financial sector and how it’s straining US small businesses that rely on these banks for capital. Bloomberg reporter Mike Sasso takes us to Florida, where a couple that’s trying to create a space for people to eat and drink while playing the fast-growing sport of pickleball is struggling to get an affordable loan.

The topic dominated discussions at this week’s Milken Institute conference in Los Angeles. Host Stephanie Flanders sat down with Milken Institute Chief Economist William Lee, who warns that cutting off small businesses from borrowing would hit the labor market almost directly. However, he says that’s exactly what the Federal Reserve wants, as illustrated by a cycle of rate hikes that, after Wednesday's latest increase, may finally be at an end.

And finally, Flanders speaks with Kristalina Georgieva, managing director of the International Monetary Fund, who said the banking crisis highlights the complacency of regulators when it comes to financial risk.

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Will Covid-19 reshape the global economy or simply shrink it? What are nations doing to protect jobs and businesses from the fallout, and what will the long-term consequences be for labor markets, global supply chains and government finances? On Stephanomics, a podcast hosted by Bloomberg Economics head Stephanie Flanders—the former BBC economics editor and chief market strategist for Europe at JPMorgan Asset Management—we combine reports from Bloomberg journalists around the world and conversations with internationally respected experts on these and other issues to bring the global economy to life.

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