Keep watch over banks, however strive to not alarm anybody.
That is how financial institution regulators appeared to view their duties within the lead-up to final month’s banking disaster, on the middle of which had been the failures of Silicon Valley Bank in California and Signature Bank in New York.
For years, federal regulators overseeing Silicon Valley Bank identified its many flaws utilizing language whose impression appeared closely blunted by technical jargon. They recognized a slew of issues, however their findings lacked urgency. They gave the financial institution’s leaders lengthy timelines to sort things, delivered general security and soundness rankings at a plodding tempo and appeared unwilling to attract large conclusions concerning the many accumulating issues.
An analogous story unfolded in New York, the place supervisors in command of monitoring Signature Bank’s actions slow-walked regulatory reviews and did not spur the financial institution’s senior leaders to repair issues that they had recognized.
Here are some takeaways from evaluations launched on Friday by the Federal Reserve, the Federal Deposit Insurance Corp. and the U.S. Government Accountability Office.
Source: www.nytimes.com