U.S. regulators say banking system ‘sound and resilient’

Washington, March 24 (BNA): The multi-regulatory US Financial Stability Oversight Board agreed on Friday that the US banking system remains “sound and resilient” despite pressures on some institutions, the US Treasury said in its latest statement to calm jittery markets. depositors in banks.

In a statement to the closed-door meeting chaired by Treasury Secretary Janet Yellen, the department said FSOC participants heard a presentation on market developments from Federal Reserve Bank of New York staff, Reuters reported.

“The board discussed current conditions in the banking sector and noted that while some institutions are under pressure, the US banking system remains healthy and resilient,” the Treasury Department said in a statement.

The videoconferencing meeting came as markets continued to swing amid fears that the two-week banking crisis sparked by the failures of Silicon Valley Bank (SIVB.O) and Signature Bank (SBNY.O) could fester, sending more inflows spilling over. smaller banks.

The panel of financial regulators, led by Yellen and including the heads of the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency, the Securities and Exchange Commission, and other regulatory agencies, met last March 12.

It was the same day that the FDIC, the Fed, and the Treasury Department announced emergency measures to support all deposits at the two failing banks and created a new Fed lending facility to boost liquidity for all banks.

Two prominent House Republicans on Friday demanded Yellen provide them with additional information about the March 12 meeting, including unadjusted minutes, votes, details on timing and bank stress test results.

“The events over the past 12 days involving both Silicon Valley Bank and Signature Bank, the ensuing market instability, and your role raise a number of questions for policymakers,” Representatives Bill Huizinga and Andy Barr, who head House Financial Services, wrote. Subcommittees, in a letter to Yellen.

They added that the basis for the decisions of the Treasury Department, the Federal Reserve Bank and the FDIC in SVB cases and signature “is of particular importance.”

Friday’s FSOC meeting came as fears of global banking contagion once again sent European bank stocks sharply lower, with Deutsche Bank and UBS hammered by concerns that regulators and central banks had yet to contain the worst shock to the sector since the 2008 global financial crisis.

But on Wall Street, stocks recovered from an earlier sell-off as three Fed chiefs said in separate remarks there was no indication that financial pressures were getting worse this week, allowing them to raise interest rates by a quarter of a percentage point.

Yellen again sought to allay fears of more bank deposits on Thursday, telling US lawmakers she was ready to repeat actions taken in Silicon Valley and Signature Bank’s failure to protect uninsured bank deposits if failures threaten more deposits.

Called “systemic risk exceptions,” those measures have been taken by Yellen, President Joe Biden, the Federal Insurance Corporation, and the Federal Reserve, which oversees Silicon Valley and Signature.

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