Without trust, our economy stops. Without trust, there is no banking system. The turmoil of the past week has tested our trust. The Fed should help answer the questions that people have.
Too many people can't think for themselves, so they believe stupid crap like SVB failed because of "woke" policies. Who believes crap like that? A lot of the mistrust is intentional. It's no wonder people are skittish.
I agree 100% in that we have to rise above the politics and the finger pointing here because it honestly doesn't solve anything at the end of the day. I see Yellen is doing her best to reassure the American people that there won't be any banking turmoil but now I'm convinced next week there will be a pause on rates.
Fed governors haven’t been shy about talking publicly until now. Powell should be the lone voice and keep competing egos off the stage. It’s the good way to have a consistent message.
Thanks for your expertise and sharing it with us! I have to admit the recent conversation between Janet Yellen and the Senator? from Oklahoma was disconcerting. My take home was she said ‘we will decide who fails and who gets bailed out’…. 😳. It definitely leads me to think that big ‘systemically important’ banks will be favored by regulators. The fact that SVB and Signature were just deemed that (because we said so) shows that they are making up the rules as they go….which is bad for trust. ☹️
I think there has been lingering distrust to some extent between the Federal Reserve and the banking industry for the past 15 years and counting. The PBS Frontline documentary Age of Easy Money was a reminder of that in my opinion.
As if the tension between preserving financial stability and fighting inflation wasn’t enough, Powell now has to find credibility when announcing emergency measures “without the use of taxpayer money”. That was the promise of the post GFC reforms, which the Fed weaken…..
so, if the bank is paid, it's a bailout. but if the depositors are paid, it's not a bailout. :-). Just trying to get my terms straight. Remember when "bailouts" used to be authorized by an act of Congress? that was sooo 2008
Too many people can't think for themselves, so they believe stupid crap like SVB failed because of "woke" policies. Who believes crap like that? A lot of the mistrust is intentional. It's no wonder people are skittish.
I agree 100% in that we have to rise above the politics and the finger pointing here because it honestly doesn't solve anything at the end of the day. I see Yellen is doing her best to reassure the American people that there won't be any banking turmoil but now I'm convinced next week there will be a pause on rates.
Great piece--we all know there is and always will be a "back-room" and just want to be in it, even its just enough to keep our "trust."
Claudia, trust would be easy for me if you were the Fed chair. As for trusting Jerome Powell, whom I think is basically corrupt, not going to happen.
Fed governors haven’t been shy about talking publicly until now. Powell should be the lone voice and keep competing egos off the stage. It’s the good way to have a consistent message.
You should do a chart on how much this fiasco increased concentrating of money at larger banks.
Thanks for your expertise and sharing it with us! I have to admit the recent conversation between Janet Yellen and the Senator? from Oklahoma was disconcerting. My take home was she said ‘we will decide who fails and who gets bailed out’…. 😳. It definitely leads me to think that big ‘systemically important’ banks will be favored by regulators. The fact that SVB and Signature were just deemed that (because we said so) shows that they are making up the rules as they go….which is bad for trust. ☹️
I think there has been lingering distrust to some extent between the Federal Reserve and the banking industry for the past 15 years and counting. The PBS Frontline documentary Age of Easy Money was a reminder of that in my opinion.
Good post! How do we make it happen?
As if the tension between preserving financial stability and fighting inflation wasn’t enough, Powell now has to find credibility when announcing emergency measures “without the use of taxpayer money”. That was the promise of the post GFC reforms, which the Fed weaken…..
I'm with her https://www.bloomberg.com/news/articles/2023-03-17/banks-toss-first-republic-lifeline-with-yellen-dimon-s-cajoling?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTY3OTAxNzkzMiwiZXhwIjoxNjc5NjIyNzMyLCJhcnRpY2xlSWQiOiJSUk1UMVJUMVVNMFcwMSIsImJjb25uZWN0SWQiOiIyMEJERUZGMDY3NzA0QzJDOTM0RkQ0N0E4MkJDQTMyOSJ9.lmJHpr1vQu1tx1byX2KctSxpB1p3lfTOpkfyOnZJ60A
so, if the bank is paid, it's a bailout. but if the depositors are paid, it's not a bailout. :-). Just trying to get my terms straight. Remember when "bailouts" used to be authorized by an act of Congress? that was sooo 2008