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Did regulation fail in the recent bank failures?

Regulators likely failed to catch and act upon red flags at both failed banks, argues Wharton professor Peter Conti-Brown.
Regulators likely failed to curtail poor practices at Signature Bank (pictured) and Silicon Valley Bank, said Wharton professor Peter Conti-Brown.
Ed Jones/AFP via Getty Images

Who's responsible for paying the failed banks’ depositors?

Mar 14, 2023
The money’s coming from a fund run by the FDIC that derives most of its revenue from banks.
The Federal Deposit Insurance Corporation, which insures bank deposits, said it will shoulder the load of covering deposits at the failed Silicon Valley and Signature banks.
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Regulators designated SVB and Signature Bank as systemic risks. But are they really?

Mar 13, 2023
The collapsed banks were granted a "systemic risk exception," which means the Federal Deposit Insurance Corp. can guarantee uninsured deposits.
Though Silicon Valley Bank had assets of $209 billion, some economists question whether its failure presented "systemic risk" to the banking system or the economy.
Noah Berger/AFP via Getty Images

For public good, not for profit.

Bank rules rollback contributed to SVB's failure, critics say

Mar 13, 2023
The rollback of Dodd-Frank reforms exempted many of the country's largest banks from stricter regulations put in place after 2008.
Customers line up to retrieve funds from a Silicon Valley Bank in Santa Clara, California, on Monday. President Joe Biden partially blamed the rollback of Dodd-Frank banking regulations for SVB's failure.
Justin Sullivan/Getty Images

Banks will pay the cost of SVB's collapse, and maybe that's "how it should be"

Mar 13, 2023
As the government moved to backstop depositors affected by the collapse of Silicon Valley Bank and Signature Bank, surviving banks will end up footing the costs, says Laurie Stewart at Sound Community Bank in Seattle.
The federal government announced it would ensure that depositors affected by Silicon Valley Bank's collapse would be made whole. "I'm really happy for them," said Laurie Stewart. "But here's the thing: we're gonna pay for it. Banks are going to pay for it."
Justin Sullivan/Getty Images