The US banking sector appears generally well positioned to weather the recent turmoil in the sector, but the experience could continue to weigh on credit conditions going forward, the bank said on Monday. Federal Reserve.
In its semi-annual report on financial stability, the US central bank stated that overall funding risks for banks remain low and that companies continue to have ample liquidity.
In addition, additional efforts by regulators following the bankruptcies of Silicon Valley Bank and SignatureBank in March they should continue to support the system if new tensions arise, said the fed.
“The Federal Reserve is prepared to deal with any liquidity pressure that may arise and is committed to ensuring that the US banking system continues to perform its vital functions.”, the entity maintained.
Although the central bank noted that bankruptcies of BLS and signature had raised concerns, maintained that the problems that sank these regional banks do not affect the entire sector, and called them “outliers” in terms of their heavy reliance on uninsured deposits.
Those companies, as well as First Republic Bank, which was shut down by regulators earlier this month and sold to JPMorgan Chase, were also dealing with large amounts of losses spurred by rapidly rising interest rates.
Depositors fled BLS just days after it appeared the entity was in trouble, precipitating its abrupt closure.
Source: Reuters
Source: Gestion
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