U.S. Capital Markets Glide Path to Clearer Skies

Taking a step back…. ….this isn’t the GFC all over again

5 Reasons This Is NOT the GFC

Large Banks Well-Capitalized to Weather Potential Stress

Banks’ capital ratios have dramatically improved since the GFC, which will help to provide added layers of resilience to potential stress

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1. Bank liquidity is tight, but this is not a banking crisis in the sense that failures were idiosyncratic and acute stress is relatively more isolated

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2. Current economy is MUCH stronger vs. the GFC

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3. Financial system is MUCH stronger (and additional oversight/rules borne out of this are likely to strengthen banking system further)*

The Fed’s ‘23 Annual Stress Test confirmed that Large Banks are “well positioned” to weather oncoming stress and possess the capital to lend even during a range of scenarios and shocks.

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4. Policymakers had MUCH faster response

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5. GFC was a housing crisis – which hit everywhere – this one is not

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To read more on the banking sector – recent turmoil and what it means for CRE – see our Bank FAQ.

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Tier 1 Capital Ratio

Source: FDIC, Federal Research, Cushman & Wakefield Research. *Additional regulatory requirements following the Fed’s Annual Stress Test and Basel III Endgame requirements may require further oversight and capital buffers, which would further buttress banking system foundations.

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