excalibur
Diamond Member
- Mar 19, 2015
- 18,159
- 34,426
- 2,290
So Joe Biden lied? No surprise there.
Then we have the Gov. Newsom connection here as well.
Then we have the Gov. Newsom connection here as well.
After bank runs led regulators to shutter Silicon Valley Bank and Signature Bank, a Monday speech by President Joe Biden pinned blame on his predecessor, Donald Trump. Legislation signed by Trump in 2018 freed regional banks like Silicon Valley from strict federal banking rules.
But state and federal regulators seem to have had the tools they needed to prevent the two bank failures. “The major flaws here were in supervision, not regulation,” says Karen Petrou, a longtime bank industry analyst at Federal Financial Analytics.
The problems at Silicon Valley and Signature stemmed from overly concentrated risks. Silicon Valley Bank’s investments, loans, and deposits mostly came from technology start-ups. When those commercial customers started yanking deposits, the bank suffered a run. Signature’s customers started bolting in fear of the New York bank’s cryptocurrency lending.
Supervisors at state banking agencies could have raised concerns about these concentrations, says Kathryn Dick, a former deputy comptroller at the Office of the Comptroller of the Currency who is now a banking consultant.
“The regulators had the tools they needed,” says Dick. “If I were sitting at a banking agency, I’d look at the banks that fall between the Big Eight on down to $100 billion in assets, and make sure I have my arms around concentration at these institutions.” Both Silicon Valley and Signature fall in that range.
...
“I don’t know what kind of stress-testing is being done in banks below the $250 billion threshold today, but regulators can use their existing authority to require any bank to conduct some form of stress testing,” says Dick. “You don’t need new regulations to do that.”
Regulators Had the Tools Needed to Prevent Bank Failures, Experts Say
Banking experts says the crises at at Silicon Valley Bank and Signature Bank could have been averted with sharper supervision.
www.barrons.com