Troubles in the financial sector spur action.
Members of Congress are considering banking reforms after the failures of Silicon Valley Bank, Signature Bank, and First Reserve Bank this spring. Concerns over the health of many smaller banks have contributed to the evaluation of the Federal Deposit Insurance Corporation and its limits on insured deposits.
The ranking member of the House Financial Services Committee, Representative Maxine Waters of California, said, “The recent bank failures have reignited concerns regarding an implicit guarantee wherein only deposits at larger banks will reliably be safe in the event of a failure.”
Committee member Representative Blaine Luetkemeyer of Missouri echoed this suggestion to expand deposit insurance across the banking industry.
Committee chair Representative Patrick McHenry of North Carolina, stated last month, “What we have to do is address over a period of time, the safety and stability of smaller banks, at a time where the market is judging their business model, their interest rate sensitivity, and the assumption that regulators are going to require a lot more capital for these banks to exist. If we look at the reason why these banks — the three of the 30 largest banks in America — have failed in the last two months, it’s because of interest rate sensitivity of their balance sheet. Which means they misjudged inflation.”
As the Lord Leads, Pray with Us…
- For Chairman McHenry to seek God’s wisdom as he heads the House Financial Services Committee.
- For committee members to be discerning as they consider banking reforms.
- For Treasury Secretary Yellen and Federal Reserve Chairman Powell as they endeavor to keep the U.S. fiscally solvent.
Sources: The Hill, Axios
