If the Banking Crisis Offers One Lesson, Let It Be This
More capital would make future disasters much less likely.
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Photographer: Justin Sullivan/Getty Images
US regulators have extracted some valuable lessons from the country’s first banking crisis in more than a decade. But one stands out: If banks were stronger in the first place, the whole unfortunate episode might’ve been avoided.
How, despite all the regulatory reforms since the 2008 financial crisis, did officials yet again find themselves scrambling to avert a systemwide disaster? Last week, both the Federal Reserve and the Federal Deposit Insurance Corp. offered their explanations in separate reports on the failures of Silicon Valley Bank and Signature Bank — part of a rash of collapses that persisted this past weekend as authorities seized distressed regional lender First Republic Bank and sold it to JPMorgan Chase & Co.