Banking Crisis: One Year Later

Sen. Bill Hagerty, R-Tenn., and Sen. Elizabeth Warren, D-Mass., sent separate letters to banking regulators on the anniversary of the failure of Silicon Valley Bank, with Hagerty questioning the Federal Deposit Insurance Corp.'s sale of Signature Bank's assets and Warren urging the regulators to tighten capital and liquidity requirements.

Midsize lenders have largely defied the most dire predictions following Silicon Valley Bank's demise. But the nation's largest banks still have structural advantages, and the regionals remain hampered by their real-estate heavy portfolios and the continuing impact of high interest rates.

During the March 2023 banking crisis, company executives had to calm panicked customers, shore up liquidity and reassure investors after two other regionals failed. Key decisions during a critical seven-day window likely averted disaster.

Ken Vecchione, leader of Western Alliance since 2018, grew up listening to his parents talk business strategy around the dinner table. He called on those lessons and his more than 30 years of experience to steer the regional bank through last year's turmoil.

Bipartisan legislation is ready for consideration in the Senate, but even if that fails, regulators have the tools they need to rein in excessive risk taking.

Bill Demchak, in a panel hosted by Brookings on Tuesday, said that last year's bank failures wouldn't have happened if the Office of the Comptroller of the Currency had been the supervisor.

Lawmakers on both sides of the aisle pulled back from criticizing the Federal Home Loan banks, seemingly taking off the table the idea of changing the system's role as a lender to troubled banks.

Like the three regional banks that failed last spring, New York Community grew quickly over a short period of time. One analyst said there's now "permanent damage" to the "investor psyche around growth banks."