Banking Stress Increases Risk of U.S. Recession, Warns Fed's Kashkari

Stress in the banking sector is being closely monitored for its potential to trigger a credit crunch, a U.S. Federal Reserve policymaker said on Sunday, as a European Central Bank official also flagged a possible tightening in lending. Recent turmoil at banks following the collapse of Silicon Valley Bank and Signature Bank and the rescue takeover of Credit Suisse has raised concerns about a widespread credit crunch that could slow down the economy. Central banks are being urged to make a joint statement that any further rate hike is off the table at least until stability has returned to the financial markets.