Regulators worried about regional bank stability four months before March crisis
4 months ago Second largest bank failure in U.S. history Major banking regulators are concerned about the dangers posed by large regional lenders to financial stability, according to a Reuters exclusive report.
Officials at the Federal Deposit Insurance Corporation said at their advisory committee on bank failures in November, Local bank deposit balances were uninsured It warned of a “ripple effect” on other banks.
FDIC Chairman Martin Gruenberg said at a conference after the 2008 financial crisis: Regulators were obsessed with keeping big banks safe.
officials still had to do the same for local bankssome of which had grown to considerable size and complexity, Gruenberg said.
Banking regulators come under fire Because the crisis could not be avoided It was triggered by a run on a Silicon Valley bank whose deposit base was mostly uninsured. The Fed and FDIC are set to release a report on Friday on the oversight of Silicon Valley and undersigned banks.
But the November meeting showed that FDIC officials were aware of the challenges they could face in dealing with a regional bank failure. But major issues remained unresolved prior to the March failure.