Mainebiz

V O L . X X I X N O. V I I A P R I L 3 , 2 0 2 3 12 B A N K I N G / F I N A N C E / I N S U R A N C E B ank wobbles and emergency rescues from Silicon Valley to Switzerland turned March into a month of madness for the global financial sector. Collapses, closures and last-minute rescues — California's Silvergate and Silicon Valley banks, New York-based Signature Bank, Credit Suisse in Zurich — have rattled financial markets and stoked fears about the durability of smaller, regional banks like the ones found all over Maine. Maine's top banking regulator, Lloyd P. LaFountain III at the Bureau of Financial Institutions, warns against overreactions, telling Mainebiz that banks and credit unions in the Pine Tree State are con- servative by nature, "so I have every confidence in that sector here in Maine." Up and down the state, the consensus is that Maine banks are well-capitalized and diversified, with suffi- cient buffers to prevent the panicked run that unraveled SVB. But the outlook gets murky if the current turmoil escalates into a wider crisis and sparks a recession. "We are not California," says Steven Cunningham, a management and economics professor at Bangor's Husson University College of Business who has stud- ied the savings-and-loan crisis of the 1980s. "Of course, if people panic and start withdrawing money from Maine banks, it is possible to create a problem." Likening what happened at SVB to the Depression- era bank run depicted in Frank Capra's 1946 film "It's a Wonderful Life," Cunningham sees no reason for that to happen in Maine. "It would be totally unwarranted." Mark Williams, a finance lecturer at Boston University's Questrom School of Business, is less optimistic, cautioning that one bad apple — or bank — can spoil the bunch. Do your employees take pride in what you do? Find out. F O R I N F O R M AT I O N A N D TO A P P LY G O TO B E S T P L AC E S TO W O R K M E. C O M A N E M P L O Y E E E N G A G E M E N T P R O G R A M D E A D L I N E: M AY 26 Brought to you by: P H O T O / T I M G R E E N WAY C O N T I N U E D O N F O L L Today all banks, even healthy ones, are being questioned by depositors. — Mark Williams Boston University Questrom School of Business F O C U S Lloyd P. LaFountain III, superintendent of the state's Bureau of Financial Institutions since May 2005, says that Maine's banking sector is healthy. S O U R C E : State Street Global Advisors S O U R C E : Federal Reserve Bank of St. Louis UP, UP AND AWAY: U.S. INTEREST RATES SELL-OFF IN REGIONAL BANK STOCKS 0% 40 60 45 50 55 65 70 1% 2% 3% 4% 5% J F M A M J J A S O N D J F M 2022 2023 Oct. Nov. Dec. Jan. Feb. Mar. Maine banks, believers in safety first, may face bumpy ride if turmoil escalates B y R e n e e C o r d e s

• Cover