Post by account_disabled on Mar 10, 2024 22:32:16 GMT -5
We cannot take the resilience of the financial system for granted.” The phrase may even sound like a no-brainer, generally speaking. But if the person saying it is the president of the world's largest central bank, then you have to understand exactly what he means. Jerome Powell, president of the United States Federal Reserve, was in Madrid this morning at a conference organized by the Bank of Spain, the IV Financial Stability Conference. Well, Powell has refused to take for granted the banking crisis that the country experienced after the collapse of Silicon Valley Bank and First Republic Bank. "We are still monitoring the situation," he explained. “We cannot predict all the stresses that will inevitably come with time and opportunity,” Powell says. «We are very reluctant to say that the turbulence in the sector is over. "Our job is to worry about things," he said, almost intoning a mea culpa.
The bank runs and bankruptcies of 2023 were painful reminders that we cannot predict all the stress that will inevitably come with time and opportunity,” he said. In this sense, he has given several examples of what has not Russia Mobile Number List worked and the different elements that the regulator "did not fully appreciate." He has acknowledged that the banking weaknesses of these entities had not appeared in the stress tests. But this was due to dysfunctions in the asset management model of these banks, which were very subject to interest rate increases. Something that was not contemplated. "SVB's vulnerability did not come from credit risk, but from excessive exposure to interest rate risk and a business model that was vulnerable in ways its management did not fully appreciate, including a heavy reliance on uninsured deposits," he said. pointed.
The Fed is surprised by the instant withdrawal of mobile deposits At the same time, difficulties and new scenarios arose in the crisis, which were not previously possible to measure with the usual instruments, such as the expansive effects of the withdrawal of deposits. “Before you saw lines at clients' offices to withdraw money. Now everything is done from the mobile phone, with much faster times. Specifically, massive withdrawals of funds are no longer a matter of days or weeks, they can now be almost instantaneous,” Powell had to admit. read also Iñaki de las Heras So covid has altered some habits and has given teleworking as an example. As many workers opted to work from home after the pandemic, the office market suffered. And the banks exposed in this real estate sector have had to suffer some weakness. Nor was it something that was on the radar of banking regulation and supervision. After his intervention, Jerome Powell took the opportunity to participate in a debate with the governor of the Bank of Spain, Pablo Hernández de Cos.
The bank runs and bankruptcies of 2023 were painful reminders that we cannot predict all the stress that will inevitably come with time and opportunity,” he said. In this sense, he has given several examples of what has not Russia Mobile Number List worked and the different elements that the regulator "did not fully appreciate." He has acknowledged that the banking weaknesses of these entities had not appeared in the stress tests. But this was due to dysfunctions in the asset management model of these banks, which were very subject to interest rate increases. Something that was not contemplated. "SVB's vulnerability did not come from credit risk, but from excessive exposure to interest rate risk and a business model that was vulnerable in ways its management did not fully appreciate, including a heavy reliance on uninsured deposits," he said. pointed.
The Fed is surprised by the instant withdrawal of mobile deposits At the same time, difficulties and new scenarios arose in the crisis, which were not previously possible to measure with the usual instruments, such as the expansive effects of the withdrawal of deposits. “Before you saw lines at clients' offices to withdraw money. Now everything is done from the mobile phone, with much faster times. Specifically, massive withdrawals of funds are no longer a matter of days or weeks, they can now be almost instantaneous,” Powell had to admit. read also Iñaki de las Heras So covid has altered some habits and has given teleworking as an example. As many workers opted to work from home after the pandemic, the office market suffered. And the banks exposed in this real estate sector have had to suffer some weakness. Nor was it something that was on the radar of banking regulation and supervision. After his intervention, Jerome Powell took the opportunity to participate in a debate with the governor of the Bank of Spain, Pablo Hernández de Cos.