Non-systemic banking stress lowers productivity and employment, but by less than systemic crises, research from the Federal Reserve Bank of Boston finds.

The researchers, Falk Bräuning and Viacheslav Sheremirov, say recent failures at Credit Suisse, Silicon Valley Bank and First Republic Bank may not be systemic shocks to the financial system. But even non-systematic stress create “a sizeable and persistent economic contraction”, they say in their paper.

The authors find “sizeable and