While the collective collapse of Silicon Valley Bank (SVB) ($209bn of assets) and Signature Bank ($110bn in assets) exceeds the biggest bank collapse in 2008 (Washington Mutual, $307bn), it is important not to confuse the failure of several regional US banks as a harbinger of the next Global Financial Crisis (GFC). It was the excessive leverage, excessive risk taking and poor regulation of the investment banks that led to the GFC, not a collapse of regional and retail banks.

In Tim Toohey’s latest quarterly update, shot just prior to the forced merger between Credit Suisse and UBS, Yarra Capital Management’s Head of Macro and Strategy details the long history of banking crises in the US and explains why he still favours local bonds in the current environment and why equities will likely to continue to consolidate in the near term.