White Paper

Regional Bank Failures Shift Nationwide’s Underwriting Perspective

The speed at which misinformation can travel online, however, will remain a contributor to uncertainty about the banking sector now and going forward.

White Paper Summary

Although traditionally an underwriter of large institutions, Nationwide’s financial services practice sees the current uncertainty plaguing regional banks as a possible business opportunity. That being said, there is enough uncertainty in the banking environment these days to dictate a conservative approach.

When economic analysts look back on 2023, they’ll point to a series of small to midsize regional bank closures as a period of notable economic uncertainty.

During a five-day period, three banks collapsed for a variety of reasons — including overexposure to risky assets like cryptocurrency and concerns about liquidity — that led customers to rapidly withdraw their deposits. Federal Reserve economists warned that these failures could cause a mild recession in the latter half of 2023, CNN reported. Global bank stock prices declined, and the S&P Banks Select Industry Index was down more than 24% for the year as of May 19, 2023.

Many expressed concerns over the uninsured deposits — those over $250,000, which is past the FDIC’s insured limit — that made up a significant amount of funds at the banks that stumbled this spring.

To learn more about Nationwide, please visit their website.

Nationwide, a Fortune 100 company, is one of the largest and strongest diversified insurance and financial services organizations in the U.S. and is rated A by A.M. Best and A+ by Standard & Poor’s.

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