That's a long term issue, but the contraction of credit is my shorter term concern. When deposits flow out of regional banks into big banks, it limits the capacity of those regional banks to fund themselves and forces them to cut lending (not the least to not consume their liquidity).

On the other hand the big banks might receive more deposits but they can't lend it either because they are constrained by capital requirements, not funding.

So logically you should have a contraction of credit, which combined with higher rates, is going to be ugly. Clearly the markets aren't pricing that right now.