![]() Powell’s hesitancy suggests that he wanted to keep a lid on the central bank having to field questions about accountability. The New York Times earlier on Thursday reported about the joint statement but not the presidential statement.Ī Federal Reserve spokesperson declined to comment. While the Fed did not allow any reference to regulation or supervision in the joint statement, that the central bank also tried to influence the presidential statement is novel, considering that they were not party to it. The debate held up the final announcement for an indeterminate period of time, according to the sources. According to three sources with knowledge of the situation, Federal Reserve chair Jerome Powell was reluctant to sign off on anything that weekend that included references to the Fed’s role in supervision, regulation, or accountability, and fought efforts to do so. The dissonance between Biden’s comments on the collapse and the previous statements was deliberate. I’m going to ask Congress and the banking regulators to strengthen the rules.” “During the Obama-Biden administration, we put in place tough requirements on banks … Unfortunately, the last administration rolled back some of these requirements. “There are important questions of how these banks got into these circumstances in the first place,” the president said. In prepared remarks the next day, Biden was a bit more explicit. Meanwhile, President Biden in his statement focused on finding “those responsible for this mess,” adding that his administration would be “continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again.” This was fairly vague about the regulatory and supervisory issues that precipitated the rescue. That joint statement even highlighted Dodd-Frank Act reforms that ensured “better safeguards for the banking industry,” ignoring the rollback of some of those reforms in 2018, and their bearing on SVB’s failure. banking system remains resilient and on a solid foundation,” avoiding any remarks about what led up to the Silicon Valley Bank collapse. Federal bank regulators at Treasury, the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) stressed that “the U.S. banking system, are mostly forward-looking in nature. ![]() ![]() The extraordinary back-to-back statements last Sunday, announcing the effective backstopping of the entire U.S. Federal Reserve Chair Jerome Powell testifies before the House Financial Services Committee on Capitol Hill, March 8, 2023.
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