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Regulators learn early lessons from 'medium bank' bankruptcies


DECRYPTION – The regulation of these institutions deserves serious attention “in terms of capital, liquidity and interest rate risk”, estimates Martin Gruenberg, head of the federal body which guarantees bank deposits.

Pending a full report on the causes of regional bank failures, promised for May 1, US regulators summoned before the Senate Banking Committee presented their first conclusions.

Michael Barr, Governor of the Federal Reserve, in charge of the supervision of the banks, considers that Silicon Valley Bank (SVB) is a "textbook case of mismanagement", despite repeated and specific warnings addressed to them by San Francisco Fed experts since 2021.

For his part, Martin Gruenberg, head of the federal agency that guarantees bank deposits (FDIC), recognizes that the two bankruptcies demonstrate that the financial stability of the United States may be affected by problems from "average" banks. whose total assets would be between 100 and 200 billion dollars.

His observation, shared by the Fed and the Treasury, changes the debate on the nature of the supervision of financial institutions.

The prudential regulation of…

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Source: lefigaro

All news articles on 2023-03-28

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