US bank volatility has less impact than in the EU

Significance

Although most banks remain stable, and central banks are primed to support any in difficulty, the combination of slower GDP growth, above-target inflation and fast-rising interest rates is likely to claim more casualties in the EU.

Impacts

• European business finance is more bank-centred than in the United States, so further bank problems will have larger real-economy impacts.
• Smaller, regional or sector-focused banks are traditionally stronger in Europe and give more concern in the United States and China.
• Mobile banking means customers can receive news and make precautionary withdrawals faster, putting even healthy banks at risk of a ‘run’.