Regional Banking Is Back
A few regional banks are set to rise from the rubble as winners of this banking crisis.
Warren Buffett once quipped that when the tide goes out, you discover who has been swimming naked. At first glance, the banking sector now looks like a nudist beach. But if you look closer, you'll discover that a few regional banks didn't forget to put on their swimsuits.
Regional Banks, Securitizations, and Subprime Lending
Regional banking was always a competitive field, but its fortunes took a negative turn a few decades ago with the surge of securitizations. Gradually old-school regional bankers found themselves competing with investors in the multi-trillion-dollar fixed-income market and their enablers on Wall Street. The regional banker who used to personally know his borrowers and manually underwrite loans had no chance against the Street's well-oiled sales machine that was both flush with cash and ready to gobble up anything that it could package as a security and resell to yield-hungry investors.
Michael Kon has a position in the following securities mentioned above: BBX. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.