Call us now:
Coming on the same day as a review by the NYDFS of its oversight of Signature bank. One suspect that regulators are self flagellating themselves for their roles in the oversight and assurance of these banks. In both cases SVB and Signature bank, issues relating to liquidity that drove both to the wall.
As with the review by NYDFS of its oversight of Signature bank, a few key takeaways glare out of the pages.
1. Management of both financial institutions failed to manage risks.
2. The regulators did not appreciate the pace of growth of the banks, and vulnerabilities they had to rapid changes in market conditions.
3. Issues identified by regulators were allowed to continue without clear, concrete and measured remedial actions.
4. Supervisors were to slow to react to changing markets.
5. Supervisors were to slow in reacting to the slow implementation of covered entities adoption of regulation, risk management oversight and assurance.
A clear takeaway from both reports is that regulators will raise the baseline of resilience. To implement a stronger rule making processes and tighter regulations. Stress testing, modeling and capital requirements over and above those required by current regulation. Holding management teams more accountable for decision making.
Ted Dziekanowski
#liquidityrisk #alm #regulation #regulatorycapital
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