The Fed’s Easy Fix to Avert Another Bank Crisis
Expanding bank oversight will be laborious. But there might be a simpler way to prevent smaller lenders like SVB from failing.
An easy fix.
Photographer: David Paul Morris/BloombergThe Federal Reserve's plan to expand oversight of lenders after the collapse of SVB Financial Group and Signature Bank is a move in the right direction. While it will likely be a laborious process, there is also an easy fix.
The Fed is considering tougher rules for midsize banks after last week’s events, the Wall Street Journal reported. They could target lenders with between $100 billion to $250 billion in assets. In 2018, lawmakers rolled back some of the restrictions imposed after the global financial crisis. They raised a threshold so that those with less than $250 billion in assets — instead of $50 billion previously — could escape the toughest regulatory scrutiny. SVB, the 16th largest lender with about $210 billion assets, was a big beneficiary.