“Some smaller banks will need more capital and the smaller institutions in the US in particular will have to adjust to stricter regulation,” Waldron said in the interview. “As a result, they become more cautious about lending. This could have an impact on the real economy. Credit is becoming tighter, which in turn could damp economic growth.”
The crises at SVB Financial Group’s Silicon Valley Bank and Credit Suisse Group AG are likely to spur scrutiny of small banks and potentially limit lending practices, Goldman Sachs Group Inc. Chief Operating Officer John Waldron said in an interview with the German newspaper Handelsblatt.
The banking system is significantly more resilient today than in the past, given greater liquidity and better capitalization for financial firms, but the latest problems will probably lead to stricter rules and higher capital requirements for smaller banks, which play “an important role in providing credit to the economy,” Waldron told the newspaper.
