Steven Kelly, Associate Director of Research at the Yale Program on Financial Stability, returns to Forward Guidance to update Jack on the Federal Reserve’s forthcoming plans to increase capital requirements for U.S. banks. Filmed on July 11, 2023.

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Kelly’s latest “Without Warning” Substack: https://www.withoutwarningresearch.com/p/the-macro-story-of-svb-isnt-just

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Timecodes:

(00:00) Introduction

(02:45) Bank Capital Ratios, Explained

(18:52) Busting Myths About Banks' Interest Rate Hedging

(38:15) Accounting For Unrealized Losses

(46:56) How Much Money Is Leaving the Banking System?

(54:16) U.S. Banking System Is "Stable But More Fragile"

(01:02:47) The Basel III Endgame

(01:05:54) Interest Rates And Financial Stability

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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.