The Next Banking Crisis? The Danger of SOFR For Bank Loan Pricing

We have unfortunately experienced three major, yet largely unexpected bank failures this past Spring.  Importantly, they were not related to outsize credit losses, nor inadequate capital, which have been the proximate causes of most such calamities in the past.  Instead, they were rooted in a gross bank “asset/liability management” (ALM) failure.  Surprisingly, I think it […]