Relief checks 2023 live updates: FDIC and First Republic Bank, new SNAP benefits, jobless claims
Regulators worried about regional banks’ stability 4 months before March crisis
Four months before the second-largest bank failure in US history, key banking regulators worried about the dangers large regional lenders posed to financial stability, according to an exclusive report by Reuters.
Federal Deposit Insurance Corporation officials told an advisory panel on bank failures in November that “large portions” of regional banks’ deposit balances were uninsured and warned of “knock-on effects” for other banks.
FDIC chairman Martin Gruenberg said at the meeting that after the financial crisis of 2008 regulators had fixated on making the biggest banks safe.
Officials had yet to do the same for regional banks, some of which had grown to considerable size and complexity, said Gruenberg.
Banking regulators have come under criticism for failing to stave off the crisis triggered by a run on Silicon Valley Bank, most of whose deposit base was uninsured. The Fed and FDIC are expected to release reports on Friday on their supervision of Silicon Valley and Signature Bank.
The November meeting shows, however, that FDIC officials were aware of challenges they could face in handling regional bank failures but key issues remained unresolved ahead of March’s failures.
(REUTERS)
