Financial stress stemming from Silicon Valley Bank's collapse could spread, a top fund manager said.
But that in itself is becoming an under-the-radar issue, he noted, as large banks' strength is now coming at the expense of regional banks — even those without issues.
Since most regional banks aren't classified as "systemically important," their clients would be out of luck in the event of a bank failure, Hatfield noted.
Unless the FDIC insures all deposits at all banks, Hatfield said that there will be no reason to put money in a non-protected regional bank.
So they'll have a negative interest margin, they'll lose money, they'll get downgraded, and they'll go out of business."