Politics

Yellen focused on the danger of "fire sales," where panic spurs investors to dump assets at prices below their fair value. Among the targets needing attention are non-bank financial intermediaries, from money-market funds and hedge funds to digital asset providers.

Jelena McWilliams, who chaired the agency during the Trump administration, said removing the cap on insured deposits would impact the banking sector in three key ways.

Federal Reserve Vice Chairman for Supervision Michael Barr said that regulators and bank management failures contributed to the bank collapses, but insisted rescue of uninsured deposits was warranted.

The new foreclosure prevention option will be available for servicers' use on a voluntary basis starting on July 1 and will become mandatory in situations where it's appropriate for borrowers beginning Oct. 1.

Speaking at a Consumer Bankers Association conference in Las Vegas, Consumer Financial Protection Bureau director Rohit Chopra said speedy communication channels represent "an opportunity and a risk."

The Federal Reserve's top regulator told the Senate Banking Committee that new standards are needed for banks with more than $100 billion in assets — standards that the Fed has broad discretion to rewrite.

Vice Chair for Supervision Michael Barr will attempt to downplay the immediate threat of the banking crisis as limited to Silicon Valley Bank and Signature Bank, while calling for long-term reforms in congressional testimony this week.

Democratic Sen. Elizabeth Warren of Massachusetts formally announced she's seeking a third term in 2024, vowing to continue pressing a progressive agenda that includes stricter rules on banks in the wake of the recent collapse of Silicon Valley Bank and Signature Bank.

Federal Deposit Insurance Corp. Chairman Martin Gruenberg said in prepared testimony that the agency is looking at adjusting capital treatment for unrealized losses and resolution requirements for midsize banks.

Silicon Valley Bank and its customers favored the simplicity and convenience of eschewing deposit insurance coverage despite the risks. Some experts say regulators' decision to make depositors whole might be sending the industry the wrong message.

The Federal Reserve also cited lack of deposit insurance and a reliance on the "speculation"-driven crypto market in its decision to deny Custodia's bid to become a state-chartered member bank.

The use of the Federal Reserve's emergency lending facilities was largely unchanged this week, indicating to some that the recent liquidity crisis isn't getting any worse.

A long-dormant executive compensation rule required by Dodd-Frank is a more promising means of achieving President Biden's call for consequences for the executives of failed banks than legislation, experts say.

Sen. Tim Scott, R-S.C., and others on the Banking Committee have requested CAMELS scores for the failed bank and various other supervisory information from the Fed.

It would be unwise to restrict the use of Home Loan bank advances to housing-related lending.

Treasury Secretary Janet Yellen repeated her comment from a day earlier that the government's recent actions were "taken to ensure that Americans' deposits are safe." She sought to clarify it with a new line: "Certainly, we would be prepared to take additional actions if warranted."

House Financial Services Committee Chairman Patrick McHenry, R-N.C., and Rep. French Hill, R-Ark., asked Treasury Secretary Janet Yellen how a systemic risk determination was made on Silicon Valley Bank and Signature Bank.

The Federal Reserve wants a smaller balance sheet to help rein in inflation. But uncertainty in the banking system is pushing it in the opposite direction.

A federal appeals court ruled in favor of the Consumer Financial Protection Bureau, setting up a court split ahead of a highly anticipated Supreme Court hearing in October. The Fifth Circuit previously ruled that the agency's funding mechanism violates the Constitution's separation of powers doctrine.

Regional bank shares slumped, dragging down the broader market, after Treasury Secretary Janet Yellen's comments and as Federal Reserve Chair Jerome Powell said he's prepared to keep raising rates until inflation shows signs of cooling.