Banking with Interest
How SVB’s Collapse Changed Bank Policy for Good
Mar 21, 2024
Exploring the aftermath of Silicon Valley Bank's collapse and its impact on bank supervision and policy-making strategies. Reflecting on regulatory supervision post-collapse, challenges in home loan bank reform, bank stability concerns, and delays in FDIC's M&A policy changes. Discussing bank policies, competition, and promoting de novo formation while discouraging mergers.
32:06
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Quick takeaways
- Large bank failures pose systemic risks, challenging regulators with spillover effects.
- Policymakers encounter obstacles in enforcing stringent regulatory measures post banking crises.
Deep dives
Challenges in Handling Large Bank Failures
The podcast discusses the challenges faced by policymakers in managing large bank failures compared to small bank failures. While the FDIC can handle small bank failures routinely, the complexity arises with large bank failures due to potential spillover effects across other banks and the economy at large. Secretary Yellen's statements about the government's support for banks during the panic underscored the limitations policymakers face during such crises.
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