The Fed director cites the “resilience” of banks in the United States amid the collapse of institutions

The official pointed out that banks, in general, have strong capital and liquidity positions

Among the repercussions of Silicon Valley Bank (SVB) AND Bank signaturethe director of Federal Reserve (Fed) Michelle Bowman assured the banking system’s “resilience” in a speech at an event organized by the Independent Banker Community of America on Tuesday.

The official pointed out that banks, in general, have strong capital and liquidity positions. “Advice[do Fed] continues to closely monitor developments in the financial markets and across the financial system,” he said.

Bowman explained that one of the most significant factors in the collapse of SVB and Signature Bank was the rapid flow of deposit withdrawals. The scenario led the Fed to create a contingency program to mitigate the effects on the rest of the market, according to her.

“The program will provide banks with an additional source of liquidity and eliminate the need for institutions to sell bonds quickly during a downturn,” he said.

In a period of silence ahead of the Federal Open Market Committee’s (FOMC) monetary policy decision next week, the director did not comment on the outlook for interest rates and economic activity.

Source: Terra

Rose

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