CONTACT: Barbara Hagenbaugh
(202) 471-0436
bhagenbaugh@fsforum.com
Washington, D.C. – Financial Services Forum President and CEO Kevin Fromer issued the following statement today after the Federal Reserve released a review of its supervision and regulation of Silicon Valley Bank (SVB):
“One should not conflate a liquidity-driven event marked by management failures and supervisory shortcomings with capital adequacy at the largest U.S. banks. The assertion in the introduction that the Fed should focus on large bank capital requirements is disconnected from the report’s conclusions.
“The resiliency of the nation’s largest banks, which are subject to the most stringent regulation and supervision, is not at issue. These firms have demonstrated through the pandemic and during the most recent events that they are a source of strength and support.”
Background
The largest banks meet highly stringent capital and liquidity requirements – which did not apply to SVB or Signature — in addition to many other requirements designed to ensure that these systemic institutions remain resilient.
Since 2009, Tier 1 capital at U.S.-based Global Systemically Important Banks (GSIB) – which acts a cushion and allows banks to continue supporting clients, customers and communities in times of stress — has increased by 53 percent to more than $1 trillion. In the same period, U.S. GSIB high-quality liquid assets – which ensure banks have enough assets that can be quickly used to meet short-term needs — have nearly tripled to more than $3 trillion
Other post-crisis regulatory and supervisory reforms, such as stress testing, living wills, and derivatives reforms, have greatly increased the resiliency of the largest U.S. banks.
Additional Background:
- Read our latest blog, Large Bank Capital Requirements and Recent Bank Failures: Why One Has Nothing to Do with the Other.
- For more information on the increases in large bank capital and bank capital requirements, read Capital and the Nation’s Largest Banks.
- Read what U.S. bank regulators have said about capital in the largest banks.
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The Financial Services Forum is an economic policy and advocacy organization whose members are the chief executive officers of the eight largest and most diversified financial institutions headquartered in the United States. Forum member institutions are a leading source of lending and investment in the United States and serve millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, deep and liquid capital markets, a competitive global marketplace, and a sound financial system.