Bank stocks are falling in the wake of the failures of SVB Bank SIVB and Signature Bank SBNY), but there are good reasons to make this contrarian investment.
First, federal regulators have made it clear that they will support banks on the edge of trouble because of depositor flight. The Federal Reserve will lend to banks against the full value of losing positions in Treasuries. “This will help banks meet deposit requests,” says Ian Lappe, portfolio manager at Gabelli Global Financial Services Fund GAFSX.
Second,…