Banking Stress Poses Risk of Recession, Says Minneapolis Fed Chair

The recent stresses in the banking system that resulted in the failures of Silicon Valley Bank and Signature Bank will take time to clear up, and those tensions will move the U.S. economy closer to recession, according to Neel Kashkari, president of the Federal Reserve Bank of Minneapolis. Kashkari is encouraged that deposit outflows seem to have slowed down, but at the same time, the capital markets have largely been closed for the past two weeks. He sees the need to make U.S. banking regulations more fair for regional and community banks.