The Federal Reserve is considering imposing tighter rules on medium-sized banks after three banks, including Silicon Valley Bank (SVB), went bankrupt within a week.
Fed officials are discussing rules that could bring capital and liquidity thresholds for midsize banks closer to the restrictions faced by the biggest Wall Street firms. Bloomberg has learned from a source familiar with the matter. The source said that an assessed change could affect the stress tests that measure the banks’ resilience to the crisis.
The decision to review regulations for banks with assets between $100 billion and $250 billion followed the seizure of SVB on Friday and Signature Bank on Sunday. On Wednesday last week, crypto-focused Silvergate Capital Corp. voluntarily liquidated its bank.
Meanwhile, the management of regional banks, which faced significant selling pressure after the bankruptcy of the SVB, began to collect their bank shares at falling prices.
According to data compiled by Bloomberg, PacWest Bancorp, Metropolitan Bank Holding Corp., and more than 100 banks, including CVB Financial Corp., they have spent at least $13.9 billion to buy their shares.
Most of the transactions took place in the last few days. On the other hand, Moody’s downgraded its outlook for the US banking system from stable to negative, noting a “significant decline” in deposits and investor confidence.