"Rising interest rates are worrying depositors that small- and mid-sized lenders are going to be facing increasing difficulties, that their business models are too heavily dependant on a low interest rate environment," said Stuart Cole, head macro economist at Equiti Capital.
"The risk is that the cost of emergency funding proves too expensive for the smaller banks and the market deems them to be no longer profitable." Investors are also concerned about the impact of elevated inflation and aggressive interest rate hikes by the Federal Reserve on companies' margins.
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