Banking system stress

Normal · Markets

Assessed by an AI model against this signal's rubric. Describes conditions; not a forecast or advice.

NormalStableSTLFSI -0.58

Financial stress index below zero; 2026 bank failures have all been small

Why it's at this level

The St Louis Fed Financial Stress Index was −0.58 in the latest weekly reading (week to 23 Oct), below its long-run average. Six small US banks have failed in 2026, the largest (Nano Banc, 25 Sep) with about $736m in assets; no new failure was reported as of 1 Nov.

What this means for you

There is no sign of systemic banking stress. Commercial property refinancing at higher rates remains the pressure point for smaller lenders.

Why it matters

Bank failures turn market losses into credit crunches; 2008 and 2023 both began as 'contained' bank problems.

What moves it

Rate shocks to bond portfolios, commercial property losses, deposit flight, private-credit links.

MarketsChecked every runChecked 1 Nov, 11:52 UK. At this level since 31 Oct, 11:26.

Status at each of the last 8 checks

How it's rated

Alert

STLFSI > 1.5, or ECB CISS > 0.45, or a systemically important bank fails or needs rescue, or emergency central-bank facilities launched.

Watch

STLFSI 0–1.5, or ECB CISS 0.25–0.45, or a mid-sized bank failure/rescue, or a large bank under visible funding pressure.

Normal

St Louis Fed Financial Stress Index < 0, ECB CISS < 0.25, and no notable bank failures or rescues.

Sources

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