NYT published a highly polemic article in the wake of the start of the U.S. quarterly reporting season, saying Wall Street does not think the banking crisis is anywhere close to being over. “Even when it is behind us,” Jamie Dimon, the C.E.O. of JPMorgan Chase, warned last week, “there will be repercussions from it for years to come.” And quarterly reports released this week by some of the country’s biggest lenders, including Citigroup, JPMorgan and Wells Fargo, will be examined closely to determine the effect of the turmoil.

According to Goldman Sachs, lenders with under $250 billion in assets (like SVB or a bit smaller) play a huge role in the economy, accounting for 80% of commercial real estate loans and 45% of consumer loans. Smaller and mid-sized banks are expected to slow lending sharply to strengthen their post-crisis balance sheets. A pullback could weigh on GDP by 0.25 to 0.5 percentage points.

Venture capital firms and start-ups. The collapse of Silicon Valley Bank, a go-to place for tech startups, has sharpened focus on the health of new businesses. Even before the bank failed, they were struggling with liquidity problems. About half of venture-backed companies will run out of money by the second half of 2023, according to Morgan Stanley strategist Andrew Sheets. If lending dries up, it could spell more bad news for struggling startups, as well as venture capital funds and their limited partners.

During U.S. banking reporting season, the industry reporting results for Q1 2023 will be released ahead of most other industrial groups, except airlines. It starts on Friday, April 14 with the largest set of bank reports. More results are due in the week of April 17 as the focus begins to shift to smaller regional banks. To assess the situation with the banking sector stocks as a whole while playing down individual stories’ deviations, and to compare it with the broader market performance, it’s worth monitoring the Dow Jones U.S. Banks Index (^DJUSBK) (https://www.spglobal.com/spdji/en/indices/equity/dow-jones-us-banks-index). The Dow Jones U.S. Banks Index is designed to measure the performance of U.S. companies in the banks sector. Its YTD change so far has been negative at -14.20%. It includes 56 largest U.S. and some of the most visible Canadian banks, starting with the “Big 5”, JPMorgan Chase, BofA, Citigroup, Goldman Sachs, Wells Fargo, and ending with the troubled SVB Financial Group (SIVBQ) and Signature Bank (SBNY).