Finance
High Rates Expose Global Banking’s Multi-Trillion-Dollar Weak Spot
- Last year’s US crisis shined the spotlight on regional banks
- Lenders in the UK, India, Italy have all faced recent stress
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The sleek London branches of Metro Bank Holdings Plc have little in common with the storefront of Banaras Mercantile Co-operative Bank near the Ganges River in northeast India or the specialty-finance operations of Milan’s BFF Bank SpA.
But those very different lenders, like Silicon Valley Bank before them, are all part of a shifting and, in some cases, worrying global trend for regional banks. Interest-rate shocks, regulatory burdens and a yawning tech gap are disrupting lenders that have served as a bedrock for regional economies for centuries, threatening to cut off consumers and businesses from their traditional funding routes.