The Risks of Deregulating Banks: Lessons from Silicon Valley Bank's Failure.

New research by economists at Stanford University, the University of Southern California, Columbia University, and Northwestern University shows that a run on deposits at banks like Silicon Valley Bank and Signature Bank could have set off a cascading series of bank failures, crippling small businesses and economic activity across wide parts of the country. The analysis of geographic risks from a banking crisis suggests that nearly half the counties in Missouri, Tennessee, and Mississippi, and every county in Vermont, Maine, and Hawaii, could be affected by a credit paralysis that could afflict entire communities. The researchers urge the government to help address these vulnerabilities by requiring banks to raise more capital to shore up their balance sheets.