The unseen risks behind recent bank failures
Global bank regulators are reviewing capital and liquidity in the wake of this year's bank failures but have flagged closer attention to supervision - and social media.
The global banking regulator has reminded everyone it’s happy to let banks fail - as long as that doesn’t destablise the entire system.
But regulators will be spending more time on social media.
Pablo Hernández de Cos, Chair of the Basel Committee on Banking Supervision and Governor of the Bank of Spain, told the Eurofi Financial Forum last month the current global regulatory regime "is not calibrated to produce ‘zero failures’, but seeks to reduce the likelihood and impact of banking stress, while facilitating financial intermediation and economic growth.”
His address in his capacity as chair of supervision summarised much of the work being done by both the Bank for International Settlements (BIS) and myriad national bodies, including the Reserve Bank of Australia and the Australian Prudential Regulation Authority.
Essentially, the system worked, according to Hernández de Cos. The failures of Silicon Valley Bank and other regional banks in the US and Credit Suisse in Europe created ructions for some months but the system has settled down.
