{"id":2930,"date":"2023-05-01T18:40:42","date_gmt":"2023-05-01T22:40:42","guid":{"rendered":"https:\/\/ifintechworld.com\/uncategorized\/heres-the-feds-plan-for-tighter-bank-oversight-after-svbs-failure\/"},"modified":"2023-05-01T18:40:42","modified_gmt":"2023-05-01T22:40:42","slug":"heres-the-feds-plan-for-tighter-bank-oversight-after-svbs-failure","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=2930","title":{"rendered":"Here\u2019s the Fed\u2019s Plan for Tighter Bank Oversight After SVB\u2019s Failure"},"content":{"rendered":"<div>\n<div id=\"imgCarousel\" class=\"imgCarousel\">\n<p><span class=\"text\">&amp;copy Bloomberg. Silicon Valley Bank headquarters in Santa Clara, California, US, on Friday, March 10, 2023. Silicon Valley Bank became the biggest US bank failure in more than a decade, after its long-established customer base of tech startups grew worried and yanked deposits.<\/span><br \/>\n<i class=\"imgGrad\"><\/i>\n<\/div>\n<p>(Bloomberg) &#8212; The Federal Reserve will undertake an expansive review of US bank rules in the wake of Silicon Valley Bank\u2019s failure, a top official said Friday following a detailed report on the bank\u2019s collapse.<\/p>\n<p>Michael Barr, the Fed vice chair for supervision, outlined a slew of potential changes to how the Fed oversees financial institutions, from capital and liquidity requirements to annual stress testing. The changes would not require legislative approval, a senior Fed official told reporters Friday, but would likely take several years to complete.<\/p>\n<p>Read more: Fed Seeks Broad Changes to Bank Rules in Aftermath of SVB<\/p>\n<p>In a letter accompanying the SVB report, Barr said the Fed should evaluate regulation and supervision in several key areas:<\/p>\n<ul>\n<li>Interest-rate risk, an area that SVB failed to manage \u201cappropriately\u201d and the Fed failed to push hard enough<\/li>\n<li>Liquidity risk, including risks from uninsured deposits and the treatment of held-to-maturity securities<\/li>\n<li>Considering applying standardized liquidity requirements to a broader set of firms<\/li>\n<li>Capital requirements, including broadening the group of firms that must take into account unrealized gains or losses on available-for-sale securities<\/li>\n<li>Incentive compensation standards that better encourage bank managers to mind risks<\/li>\n<li>Stress-testing requirements, which the Fed eased in 2019 for mid-size banks like SVB<\/li>\n<\/ul>\n<p>Barr also recommended changes to how the Fed supervises banks on the ground, including:<\/p>\n<ul>\n<li>Paying closer attention to particular risks posed by firms with rapid growth or other special factors, such as concentration, regardless of asset size<\/li>\n<li>Requiring, in individual cases, additional capital or liquidity for firms with inadequate capital planning, liquidity risk management or governance and controls. For example: \u201cLimits on capital distributions or incentive compensation could be appropriate and effective in some cases\u201d<\/li>\n<li>Developing a culture that \u201cempowers supervisors,\u201d after staff members failed to act quickly or forcefully on SVB<\/li>\n<li>Encouraging supervisors to think through potential \u201ctail events with severe consequences\u201d<\/li>\n<\/ul>\n<p>\u00a92023 Bloomberg L.P.<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.investing.com\/news\/stock-market-news\/heres-the-feds-plan-for-tighter-bank-oversight-after-svbs-failure-3067959\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&amp;copy Bloomberg. Silicon Valley Bank headquarters in Santa Clara, California, US, on Friday, March 10, 2023. Silicon Valley Bank became the biggest US bank failure in more than a decade, after its long-established customer base of tech startups grew worried and yanked deposits. (Bloomberg) &#8212; The Federal Reserve will undertake an expansive review of US [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":2931,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[1],"tags":[83],"class_list":["post-2930","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-uncategorized","tag-featured","post_format-post-format-video"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Here\u2019s the Fed\u2019s Plan for Tighter Bank Oversight After SVB\u2019s Failure | iFintechWorld<\/title>\n<meta name=\"description\" content=\"&amp;copy Bloomberg. Silicon Valley Bank headquarters in Santa Clara, California, US, on Friday, March 10, 2023. 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