Last March, Silicon Valley Bank collapsed and kicked off the most significant U.S. banking crisis in years. These reforms have substantially raised banks’ capital levels and constrained many behaviors that were at the heart of that crisis, like bets on risky mortgages. A larger group of banks would face some tougher standards under the proposal, including those the size of SVB. Yet this final batch of rules won’t directly address some of the most salient causes of the collapses of SVB, Signature Bank or First Republic. That became a problem as banks faced higher deposit costs or increasing withdrawals as customers sought higher yields elsewhere.

Source: Wall Street Journal March 10, 2024 10:07 UTC