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Even if the worst is over for banks, the outlook remains bleak

A risk-on mood has prevailed today amid easing concerns over the US banking system. That seems to reflect a view that intervention, perhaps including an extension of FDIC insurance to deposits above the existing $250,000 cap, will see off further crises. It makes sense that this would calm the most acute concerns over US regional banks; but that doesn’t mean that the outlook is all rosy. After all, recent events have soured what already looked to be a fairly bleak outlook for the US economy.

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