No Confidence in the Fed
While Federal Reserve officials have sought to assure markets that the US banking system is sound in the wake of Silicon Valley Bank’s collapse, investors and depositors have no reason to believe them. Only meaningful reforms of deposit insurance, regulation, and governance can restore the Fed’s credibility.
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NEW YORK – The aftershocks of the collapse of Silicon Valley Bank (SVB), while seemingly fading, are still reverberating around the world. Although Federal Reserve officials have taken pains to assure the public that the US banking system is sound, it is unclear why anyone should believe them. After all, Fed Chair Jerome Powell told Congress the same thing just days before SVB’s collapse in March.