SVB statement from Fed Vice Chairman Barr

The Fed shared the text of Barr’s speech at tomorrow’s session of the US Senate Committee on Banking, Housing and Urban Affairs on the latest bank failures and the intervention of federal regulators.

Emphasizing that the US banking system is strong and resilient with its strong capital and liquidity, Barr stated that they will continue to closely monitor conditions in the banking system and are ready to use all tools for institutions of all sizes when be necessary. to keep the system safe and sound.

“HE HAS THE PAIN OF ESCAPE”

“SVB went bust because the bank’s management failed to effectively manage interest rate and liquidity risk, and then the bank suffered the devastating and unexpected flight of uninsured depositors in less than 24 hours,” Barr said. he performed the assessment of it.

“THE BANK WAITS TOO LONG TO SOLVE ITS PROBLEMS”

Stating that the SVB failure requires a thorough review, including Fed control over the bank, Barr said: “The SVB failure is a textbook case of mismanagement.” he used the phrase.

“The bank has waited too long to fix its problems and, ironically, the belated steps it took to strengthen its balance sheet sparked the flight of uninsured depositors that led to the bankruptcy of the bank,” said Michael Barr. he made the comment of him.

Noting that the bankruptcy of the SVB threatened the entire banking system, Barr said they are working to improve the stress test and modify liquidity rules as well as long-term debt requirements for large regional banks.

A trustee was appointed on March 10 for SVB, the 16th-largest bank in the US, and the bank’s failure was one of the biggest failures since the 2008 global financial crisis. (BRITISH AUTOMOBILE CLUB)