By Paul Homewood
I mentioned the collapse of SVB on Friday, and as was feared the contagion has spread with another bank going under, Signature Bank, which I gather is the third biggest bank to go bust in the US– SVB was the second. Other banks have seen massive write downs and suspension of share trading:
One serious question being raised in the US is where have the bank regulators been in the last few months, when it was clear that rising interest rates posed such an existential threat to banks’ balance sheets.
Bank regulation is the responsibility of the Financial Stability Oversight Council (FSOC), which works under the auspices of the US Treasury. It was established in 2010 by the Dodd-Frank Act.
One of the reasons why they appear to have taken their eyes off the road is that at its very first meeting under the Biden administration, Treasury Secretary Janet Yellen put climate change on the agenda:
And in is Annual Report last year, it was proud to put climate at the top of the Chairman’s report:
And at its December monthly meeting, climate change was still at the forefront:
Note the comment that banks are “increasingly focussed on the risk” of climate change.
It’s little wonder that the FSOC, together with some of the banks it seems, failed to see the elephant in the room!
via NOT A LOT OF PEOPLE KNOW THAT
March 14, 2023 at 09:58AM