The Regional Banking Industry: On the Edge Cracks in the Foundation The façade is starting to slip. What once looked like a relatively stable landscape of regional lenders has been pierced by a series of gut punches: sour loans, exposure to bankrupt companies, and even fraud. Banks like Zions are revealing tens of millions in losses tied to borrowers once assumed to be solid. That kind of exposure isn’t just a bad quarter—it’s a signal that their internal risk controls were either asleep at the wheel or hopelessly optimistic. Collapsing Margins and Tightened Credit Regionals already operate on thinner margins than their “too-big-to-fail” cousins. New losses tighten those margins even further, leaving them vulnerable to shocks, short-term funding stress, and…
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