Financial Contagion Strikes Back (Energy Intelligence, March 16, 2023)

"Financial contagion once seemed banished. Few bank failures occurred from the end of World War II to 1979. However, there have been at least four since 1980: the Penn Square Bank failure in 1982, the savings and loan meltdown in 1988, the Great Recession caused by Lehman Brothers’ bankruptcy, and now, in 2023, the closure of Silicon Valley Bank (SVB). Contagion has returned with the world’s deregulation of financial markets. Its return seems to be the cost of accelerated economic growth. On the downside, however, substantial damages have been imposed on important economic sectors after every banking crisis. The impacts on the petroleum business have been particularly harsh, and now the fallout for oil following SVB’s failure may be especially severe."


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