Preferred Shares Suffer as Historic Rout Spreads From Banks

The video discusses concerns over regional banks, focusing on preferred shares and their role in capital raising. It highlights the challenges smaller lenders face in raising capital, potentially leading to divestment or reduced loan creation. The Fed's Senior Loan Officer Opinion survey provides insights into loan standards and reactions from banks, especially smaller ones, in response to these challenges.

What are preferred shares similar to in European banks?

• Derivatives

• Equities

• Bonds

• AT1s

Why do banks issue preferred shares?

• To reduce taxes

• To increase market share

• To diversify investments

• To raise capital

What is a potential consequence for smaller US lenders struggling to raise capital?

• Merging with larger banks

• Increasing interest rates

• Expanding their loan portfolio

• Divesting their loan book

What does the Federal Reserve's Senior Loan Officer Opinion survey reveal?

• Interest rate changes

• Loan standards tightening

• Economic growth forecasts

• Bank profitability

How is the survey data categorized?

• By loan type

• By bank size

• By interest rate

• By geographic region